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sis 




San Francisco Public Library 

Government Information Center 
San Francisco Public Library 
100 Larkin Street, 5th Floor 
San Francisco, CA 94102 



REFERENCE BOOK 

Not to be taken from the Library 



Digitized by the Internet Archive 
in 2013 



http://archive.org/details/1minutes200203sanf 




City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 



Clerk: GailJohnson 



City Hall 

1 Dr. Carlton B 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, December 04, 2002 



12:30 PM 
Regular Meeting 



City Hall, Room 263 



Members Present: Aaron Peskin, Sophie Maxwell. 
Members Absent: Chris Daly. 



MEETING CONVENED 



The meeting convened at 12:38 p.m. 
021339 [Financial Information Privacy] 
Supervisors Peskin, Daly 

Ordinance amending the San Francisco Business and Tax Regulations Code to enact a new Article 20 to 
provide for the protection of private financial information. 

7/29/02, ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 8/28/2002. 

10/16/02, CONTINUED TO CALL OF THE CHAIR. Heard in Committee. Speaker: Dorji Roberts, Deputy City Attorney. 

Supervisor Daly added as co-sponsor. 

Heard in Committee. Speakers: Shelly Curran, Consumers Union: Linda Ackerman, Legal Counsel to 

Privacy Activism: Richard Holliber, Executive Director, Consumer Federation of California; Mike DeCastro; 

Dorji Roberts, Deputy City Attorney; Nathan Nayman, Executive Director, Committee on Jobs; Lee Blitch, 

President, Chamber of Commerce; Leland Chan, California Bankers Association; Karen Pierce, President, 

Bayview Hunters Point Democratic Club. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 









City and County of San Francisco 



Printed at 3:41 PM on 3 3 04 



Finance Committee 



Meeting Minutes 



December 4, 2002 



021752 [Reserved Funds, Department of Children, Youth and their Families] 

Hearing to request release of reserved funds, Department of Children, Youth and their Families, fiscal year 

2002-03 budget, in the amount of $700,000 to fund programs for the community-based organizations. (Mayor) 

10/31/02, RECEIVED AND ASSIGNED to Finance Committee. 

1 1/13/02, CONTINUED. Heard in Committee. Speakers: Brenda Lopez, Director, Department of Children, Youth and Their Families; 

Supervisor Sandoval; Margaret Brodkin, Director, Coleman Advocates for Children and Youth. 

Continued to 11/20/02. 

1 1/20/02, CONTINUED. Heard in Committee. Speakers: Brenda Lopez, Director, Department of Children, Youth and Their Families; 

Supervisor Sandoval. 

Continued to 12/4/02. 

Speakers: None. 
Continued to 12/11/02. 
CONTINUED by the following vote: 

Ayes; 2 - Peskin, Maxwell 
Absent: 1 - Daly 



021879 |Official Advertising] 

Resolution designating the San Francisco Independent to be the official newspaper of the City and County of 
San Francisco for the category of non-consecutive day official advertising, for the period commencing January 
1, 2003 and ending June 30, 2003. (Purchaser) 

(Public Benefit Recipient.) 

1 1/20/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at the 

December 4, 2002 meeting. 

Heard in Committee. Speakers: Judith Blackwell; Mike Ward, Purchasing Department. 
RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 
Absent: 1 - Daly 



021894 |Multifamily Housing Revenue Bonds - Carter Terrace] 
Supervisors Maxwell, Daly 

Resolution authorizing the issuance and delivery of multifamily housing revenue bonds (as defined herein) in 
an aggregate principal amount not to exceed $17,000,000 for the purpose of providing financing for a 
multifamily rental housing project; approving the form of and authorizing the execution of an indenture 
providing the terms and conditions of the bonds; approving the form of and authorizing the execution of a bond 
purchase contract providing the terms and conditions for the sale of the bonds; approving the form of and 
authorizing the execution of a regulatory agreement and declaration of restrictive covenants; approving the 
form of and authorizing the execution of a loan agreement; approving the form of and authorizing the execution 
of an intercreditor agreement; approving the form of and authorizing the preparation and distribution of an 
official statement relating to the bonds; making low income housing findings; ratifying and approving any 
action heretofore taken in connection with the bonds and the project; approving and authorizing the execution 
and delivery of any document necessary to implement this resolution; and related matters. 

(Public Benefit Recipient.) 

1 1/12/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at the 

November 20, 2002 meeting. 

Heard in Committee. Speakers: Joel Lipski, Mayor's Office of Housing. 
RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 
Absent: 1 - Daly 



City and County of San Francisco 



Printed at 3:41 PM on 3/5/04 



3 1223 06446 5959 



Finance Committee 



Meeting Minutes 



December 4, 2002 



020663 [Extension of Sunset Clause - Utilization of Bid/RFP Process for Awarding of Parking Authority Leases 
and Management Contracts] 

Ordinance amending Section 17.11 (a) of the San Francisco Administrative Code to extend the authorization of 
the Parking Authority and the Municipal Transportation Agency to utilize a Bid/RFP process for the awarding 
of all leases and management agreements for the use or operation of parking facilities. (Parking and Traffic 
Department) 

4/24/02, RECEIVED AND ASSIGNED to Finance Committee. 

7/3 1 /02, CONTINUED TO CALL OF THE CHAIR. Speakers: None. 

1 1/26/02, ASSIGNED to Finance Committee. 

1 1/26/02, SUBSTITUTED. Parking and Traffic Department submitted a substitute ordinance bearing new title. 

Heard in Committee. Speakers: Scott Ruble, Parking Authority, Department of Parking and Traffic; Ron 
Szeto, Parking Authority; Harvey Rose, Budget Analyst. 

Amended by adding "the Department shall report to the Board by June 1, 2003, on the development and use of 
performance measures. " Further amended by adding the following Section 2: 

"The Department shall Develop and Utilize quantitative, outcome-based performance measures to aid in the 
measurement of garage operator performance. The department will report these measures in writing to the 
Board by June 1 , 2003." 
AMENDED. 

Ordinance amending Section 17.1 1 (a) of the San Francisco Administrative Code to extend the authorization of 
the Parking Authority and the Municipal Transportation Agency to utilize a Bid/RFP process for the awarding 
of all leases and management agreements for the use or operation of parking facilities; the Department shall 
report to the Board by June 1, 2003, on the development and use of performance measures. (Parking and 
Traffic Department) 
RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021826 [Release of Funds, Department of Elections] 

Hearing to request release of reserved funds, Department of Elections, fiscal year 2002-03 budget, in the 

amount of $1,322,849 to fund the December 10, 2002 run-off election. (Elections Department) 

1 1 /4/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled at the November 1 3, 2002 

meeting. 

Heard in Committee. Speakers: Mr. Arntz, Department of Elections; Michael Mendelson, President, 

Elections Commission; Edward Harrington, Controller; Debra Newman, Budget Analyst's Office; Michael 

Hennessey, Sheriff. 

Release of reserved funds in the amount of $1 ,167,598 approved. 

APPROVED AND FILED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



City and County of San Francisco 



Printed at 3:41 PM on 3/5/04 



Finance Committee Meeting Minutes December 4, 2002 



021796 [Port Security Services Civil Service Exclusion] 

Resolution approving the Controller's certification that Port Area Security Services for the Port of San 
Francisco can be practically performed by a private contractor at a lower cost than if the work were performed 
by City employees at budgeted levels. (Port) 

(Fiscal impact; No Public Benefit Recipient.) 

10/25/02, RECEIVED AND ASSIGNED to Finance Committee. 

1 1/21/02, SUBSTITUTED. Port submitted a substitute resolution bearing new title. 

1 1/21/02, ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Joel Robinson, Port. 

RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021836 [Contracting out Status Offender Shelter and Intake Services] 
Supervisor Gonzalez 

Resolution concurring with the Controller's certification that Intake and Shelter Services to Status Offenders 
can be practically performed by private contractor for lower cost than similar services performed by city and 
county employees. (Juvenile Probation Department) 

(Fiscal impact; Public Benefit Recipient.) 

1 1/12/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Edward Harrington, Controller. 

RECOMMENDED., by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021839 [Redevelopment Agency Budget Amendment for Fiscal Year 2002-2003] 

Resolution approving an amendment to the Budget of the Redevelopment Agency of the City and County of 
San Francisco for Fiscal Year 2002-2003 by increasing the Agency's expenditure authority in an amount not to 
exceed $43,100,000; authorizing the Agency's issuance of Tax Allocation Bonds, in one or more series, each in 
either Variable Rate or Fixed Rate Mode, in an amount not to exceed $43,100,000; authorizing the Agency's 
receipt of additional Tax Increment necessary to repay the principal and interest on said bonds; and approving 
a Cooperation and Tax Increment Reimbursement Agreement with the Agency with respect to the Yerba Buena 
Center Redevelopment Project Area. (Redevelopment Agency) 

1 1/14/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at the 
December 4, 2002 meeting. 

Speakers: None. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 



City and County of San Francisco 4 Printed at 3:41 PM on 3/5/04 



Finance Committee Meeting Minutes December 4, 2002 

Resolution approving an amendment to the Budget of the Redevelopment Agency of the City and County of 
San Francisco for Fiscal Year 2002-2003 by increasing the Agency's expenditure authority in an amount not to 
exceed $43,100,000; authorizing the Agency's issuance of Tax Allocation Bonds, in one or more series, each in 
either Variable Rate or Fixed Rate Mode, in an amount not to exceed $43,100,000; authorizing the Agency's 
receipt of additional Tax Increment necessary to repay the principal and interest on said bonds; and approving 
a Cooperation and Tax Increment Reimbursement Agreement with the Agency with respect to the Yerba Buena 
Center Redevelopment Project Area; and authorizing an agreement between the Agency and the Parking 
Authority pertaining to the operation of the proposed Jessie Square Garage. (Redevelopment Agency) 

(Fiscal impact.) 

CONTINUED TO CALL OF THE CHAIR AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 
Absent: 1 - Daly 



Note: The Chair intends to entertain a motion to continue consideration of Item 10, File 
021792, to the Call of the Chair: 



021792 [Street Artist Certificate Fee Increase] 

Ordinance amending Article 24 of the San Francisco Police Code by amending Section 2401.1 to increase the 
fee for a Street Artist Certificate. (Arts Commission) 

(No Public Benefit Recipient.) 

10/22/02, RECEIVED AND ASSIGNED to Finance Committee. 

1 1/20/02, CONTINUED. Speakers: None. 

Continued to 12/4/02. 

Heard in Committee. Speakers: None. 
TABLED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



Note: The Chair intends to entertain a motion to continue consideration of Item 11, File 
021804, to the December 18, 2002, meeting: 



021804 [Garbage Collection Truck Licensing Fee] 

Ordinance increasing the licensing fee for garbage trucks and the amount deposited into the Mandatory Refuse 
Collection Service Fund by amending Section 249.6 of the San Francisco Business and Tax Regulations Code 
and Section 10.100-7 of the San Francisco Administrative Code and ratifying past actions taken in connection 
with such licensing fee. (Public Health Department) 

(No Public Benefit Recipient.) 

10/21/02, ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 1 1/20/2002. 

1 1/20/02, CONTINUED. Speakers: None. 

Continued to 12/4/02. 

Speakers: None. 
Continued to 12/18/02. 
CONTINUED by the following vote: 

Ayes: 2 - Peskin, Maxwell 
Absent: 1 - Daly 

City and County of San Francisco 5 Primed at 3:42 PM on I 5 04 



Finance Committee Meeting Minutes December 4, 2002 



021916 [Power Purchase Agreement] 

Supervisors Maxwell, McGoldrick, Peskin 

Resolution approving a power purchase agreement with the California Department of Water Resources. 
1 1/18/02, RECEIVED AND ASSIGNED to Finance Committee. Sponsor requests this item be scheduled for consideration at the 
December 4, 2002 meeting. 

Heard in Committee. Speakers: Theresa Mueller, Deputy City Attorney; Ben Rosenfield, Mayor's Budget 
Office; Mr. Smeloff, Public Utilities Commission; Harvey Rose, Budget Analyst; Mike Thomas, Communities 
for a Better Environment; Karen Pierce, President, Bayview Hunters Point Democratic Club; Theodore 
Lakey, Deputy City Attorney. 
RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



LITIGATION 



Conference with City Attorney 

[Convene in Closed Session] 

Motion that the Finance Committee of the Board of Supervisors convene in closed session with the City 
Attorney, under the provisions of Government Code Section 54956.9 (a) and Administrative Code Section 67.8 
(3), for the purpose of conferring with, or receiving advice from, the City Attorney regarding proposed 
settlements in the lawsuits or claims listed below. 

02 1 893 [Settlement of Lawsuit] 

Supervisors Maxwell, McGoldrick 

Ordinance authorizing settlement of the lawsuit filed by the City and County of San Francisco, on behalf of the 
People of California, against the Williams Energy Companies; the lawsuit entitled People v. Dynegy, et al. was 
filed on January 18, 2001, and has been consolidated as Wholesale Electricity Antitrust Cases I & II in the 
United States District Court, Southern District of California, Case Nos. 02 CV 0990-RHW, CV 02-1000-RHW, 
02 CV-1001 RHW; which settlement provides a modification of the long-term contracts between the State of 
California and Williams, transfer to the City and County of San Francisco of four electric generating turbines 
for use within the City, payment of approximately $19 million to assist with siting and developing electric 
generating equipment in San Francisco and elsewhere; and payment to City and County of San Francisco of 
$500,000 for attorney's fees and other expenses of litigation. 

(No Public Benefit Recipient.) 

1 1/12/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at the 

December 4, 2002 meeting. 

Heard in Committee. Speakers: Theresa Mueller, Deputy City Attorney; Ben Rosenfield, Mayor's Budget 
Office; Mr. Smeloff, Public Utilities Commission; Harvey Rose, Budget Analyst; Mike Thomas, Communities 
for a Better Environment; Karen Pierce, President, Bayview Hunters Point Democratic Club; Theodore 
Lakey, Deputy City Attorney. 
RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



City and County of San Francisco 6 Printed at 3:42 PM on 3/5/04 



Finance Committee Meeting Minutes December 4, 2002 



ADJOURNMENT 



The meeting adjourned at 3:52 p.m. 



City and County of San Francisco Primed at 3:42 I'M on I S 04 



15 



oz. 



CITY AND COUNTY 




[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



OF SAN FRANCISCO 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 

November 27, 2002 



TO: ..Finance Committee 

FROM: ,Budget Analyst 

SUBJECT: December 4, 2002 Finance Committee Meeting 

Item 1 - File 02-1339 



DOCUMENTS DEPT. 
DEC - 3 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



Note: This item was continued at the Finance Committee meeting of October 16, 
2002. This report is based on the legislation in its current form. However, 
the Office of the Sponsor will introduce an Amendment of the Whole at the 
Finance Committee meeting of December 4, 2002. 

Item: Ordinance amending the San Francisco Business and Tax 

Regulations Code to enact a new Article 20 to provide for 
the protection of private financial information. 



Description; 



The proposed ordinance, to be known as the ''San 
Francisco Financial Information Privacy Ordinance of 
2002," would amend the San Francisco Business and Tax 
Regulations Code to require financial institutions to 
provide specified notice to, and to obtain the consent of 
theh consumers before disclosing or sharing confidential 
consumer information with any third party. The proposed 
ordinance provides that a "financial institution" is defined 
as "any institution engaging in financial activities as 
described in Section 1843(k) of Title 12 of the United 
States Code and doing business in the City and County of 
San Francisco. An institution that is significantly engaged 
in financial activities is a financial institution." 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Under the proposed ordinance, which, if approved, would 
become operative on January 1, 2003, a financial 
institution would be prohibited from denying a consumer 
a financial product or a financial service because the 
consumer has not provided consent to the financial 
institution to disclose or share the consumer's confidential 
information. In addition, the proposed ordinance would 
require that financial institutions which receive 
confidential consumer information from a third party take 
reasonable steps to ensure that the third party providing 
the information has followed the required notice and 
consent procedures, as contained in this proposed 
ordinance, prior to sharing confidential consumer 
information. 

"Confidential consumer information" is defined as 
personally identifiable financial information (1) provided 
by a consumer to a financial institution, (2) resulting from 
any transaction with the consumer or any service 
performed for the consumer, or (3) otherwise obtained by 
the financial institution including any list, description, or 
other grouping of consumers, and publicly availal .c 
information pertaining to them that is derived using any 
nonpublic personal information, but does not include any 
list, description, or other grouping of consumers, and 
publicly available information pertaining to them that is 
derived without using any confidential consumer 
information. According to the proposed ordinance, 
"Personally identifiable financial information means 
information (1) that a consumer provides to a financial 
institution to obtain a product or service from the 
financial institution, (2) about a consumer resulting from 
any transaction involving a product or service between 
the financial institution and a consumer, or (3) that the 
financial institution otherwise obtains about a consumer 
in connection with providing a product or service to that 
consumer." 

The proposed ordinance provides that certain consumer 
information can be released by a financial institution, 
including: (a) information that is not personally 
identifiable to a specific consumer; (b) information that is 
necessary to effect, administer, or enforce a transaction 
requested or authorized by the consumer; (c) information 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

2 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



that is necessary to protect the confidentiality or security 
of the financial institution's records, to protect against 
fraud or for resolving consumer disputes or inquiries; (d) 
information to be released to persons holding a legal or 
beneficial interest in the consumer, or acting in a 
fiduciary or representative capacity on behalf of the 
consumer; (e) information to be released for insurance 
rate advisory organizations and other apphcable rating 
agencies; (f) information to be released as required by 
various Federal and State laws, including the Right to 
Financial Privacy Act of 1978 and the Fair Credit 
Reporting Act; (g) information to be released in connection 
with sale, merger, transfer, or exchange of the financial 
institution; and (h) information to be released to identify 
or locate missing and abducted children, witnesses, 
criminals and fugitives. 

The proposed ordinance would also establish civil 
remedies and penalties for violations of the provisions of 
the proposed San Francisco Financial Information Privacj 7 
Ordinance of 2002, which would become operative 
January 1, 2004. Any financial institution that violates 
the terms of this proposed ordinance would be liable for 
an administrative fine or civil penalty to be imposed by 
the City not to exceed the following amounts: 

• S2,500 for negligently disclosing or sharing 
confidential consumer information, upon the first 
violation; 

• $2,500 for knowingly and willfully obtaining, 
disclosing or using confidential consumer information, 
upon the first violation; 

• $10,000 for knowingly and willfully obtaining, 
disclosing or using confidential consumer information, 
upon the second violation; 

• $25,0000 for knowingly and willfully obtaining, 
disclosing or using confidential consumer information, 
upon the third or subsequent violation; 

• $5,000 for knowingly and willfully obtaining, 
disclosing or using confidential consumer information 
for financial gain; 

• $25,000 for knowingly and willfully obtaining, 
disclosing or using confidential consumer information 
for financial gain, upon the second violation; and 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



$250,000 for knowingly and willfully obtaining, 
disclosing or using confidential consumer information 
for financial gain, upon a third or subsequent 
violation. 



Comments: 



Recommendation: 



1. According to Mr. Dorji Roberts of the City Attorney's 
Office, the proposed ordinance is modeled after Senate 
Bill 773, as amended in the California Senate on 
September 6, 2001. Senate Bill 773 failed to pass the 
Assembly on August 31, 2002. 

2. Mr. Roberts explains that the proposed ordinance does 
not specify which City official(s) would be responsible for 
the assessment and enforcement regarding the provisions 
of the ordinance pertaining to civil remedies and 
penalties. Mr. Roberts could not provide any estimates of 

(a) the penalties which might be realized by the City and 

(b) the related administrative costs to enforce the 
proposed ordinance. 

3. Mr. Roberts has advised the Budget Analyst that the 
Sponsor may introduce an Amendment of the Whole at 
the Committee meeting. As of the writing of this report, 
such amendments were not available and therefore have 
not been addressed in this report. 

Approval of the proposed ordinance is a policy matter for 
the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Item 2 - File 02-1752 

Note: This item was continued by the Finance Committee at its meeting of 
November 20, 2002. 



Department: 
Item: 

Amount: 
Source of Funds: 

Description: 



Budget: 



Department of Children, Youth and Their Families 
(DCYF) 

Hearing to request the release of reserved funds in the 
amount of $700,000 to fund programs for nonprofit 
Community-based organizations. 

$700,000 

General Fund monies appropriated and reserved by the 
Board of Supervisors in the DCYF FY 2002-2003 budget. 

In the FY 2002-2003 budget, the Board of Supervisors 
appropriated $1,700,000 for the DCYF to be used for 
nonprofit community-based organizations. Of the 
$1,700,000 appropriation, the Board of Supervisors 
specifically added $700,000 to the Mayor's Recommended 
FY 2002-2003 budget to fund community-based 
organizations, which the Department is now requesting 
be released. 

According to Mr. Ken Bukowski of DCYF, the entire 
$1,700,000 will be allocated to nonprofit community- 
based organizations for one-time needs. The nonprofit 
community-based organizations are being selected 
through a single competitive Request for Proposals (RFP) 
process. The attached memorandum (Attachment I) 
provided by Ms. Nani Coloretti of DCYF contains (a) 
additional background information on this subject request 
for the release of $700,000, (b) a description of the RFP 
process, and (c) a description of the process used to select 
the nonprofit community-based organizations to receive 
allocations from the total available funds of $1,700,000. 

As of the writing of our November 13, 2002 report to the 
Finance Committee, according to Mr. Bukowski, none of 
the $1,700,000 had been allocated to nonprofit 
community-based organizations. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

5 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Comments: 



Recommendation: 



1. According to Mr. Bukowski, DCYF received responses 
to its RFP from the 189 nonprofit community-based 
organizations listed in Attachment II. Such requests total 
$10,810,033 or $9,110,033 more than the available 
funding of $1,700,000. 

2. Ms. Coloretti has provided additional information on 
the requested funds in her memorandum (Attachment I). 

3. In the professional judgement of the Budget Analyst, 
the subject reserved funds in the amount of $700,000 
should not be released until DCYF has submitted a report 
to the Board of Supervisors which accounts for the entire 
$1,700,000 Board of Supervisors appropriation. This 
report should include (a) identification of the nonprofit 
community-based organizations selected, (b) the amount 
of the allocation to each nonprofit community-based 
organization, and (c) a description of the proposed 
expenditures for each non-profit community-based 
organization. 

4. At the Finance Committee's meeting of November 20, 
2002, the Finance Committee requested that Ms. Brenda 
Lopez of the DCYF submit additional information 
pertaining to the proposed allocation of funds. 

Approval of the requested release of $700,000 is a policy 
matter for the Finance Committee. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



DEPARTMENT OF CHILDREN, 




Attach m ent I 
Page Hof t^ 



Willie L. Brown, Jr. 

MayoT 

Brenda Lopez 

Director 



YOUTH AND THEIR FAMILIES 



DATE: November 7, 2002 

TO: Budget Analyst 

FROM: Nam Coloretti, Director of Budget and Planning 

SUBJECT: Request to Release Reserved Funds 



Pursuant to your request, the Department of Children, Youth and Their Families (DCYF) hereby 
submits this memorandum in support of its request to release reserve funds in the amount of S7OO.OO0 
to fund nonprofit community-based programs. 

History and Proposed Use of DCYF Reserved Funds 

During the FY 2002-2003 appropriation process. S700.000 of the general fund monies appropriated to 
DCYF was placed on reserve pursuant to an amendment introduced by Supervisor Sandoval during the 
Board of Supervisors' review of the budget. Our understanding is that the primary reason for placing 
the S700,000 on reserve was to allow for a more public process to determine the best way to expend 
the funds, rather than rely on the more limited decision-making process of considering specific add- 
back requests made to individual Supervisors. Thus, 5700,000 was placed on reserve for the purpose 
of supporting citywide programs for children and youth, with the understanding that the funds would 
be released after DCYF obtained additional commu ni ty input as to the best way to target expenditure 
of these monies. 

Having completed a discussion among various stakeholders as to the best way to expend the 5700,000 
placed on reserve, DCYF now requests release of these funds so they may be expended (along with 
51,000,000 in Children's Fund dollars) on grants to community-based organizations that have one-tine 
expenditure needs. The decision to utilize the reserve funds and Children's Fund dollars in this 
manner is based on input provided from our Community Needs Assessment and meetings of the 
Children's Fund Citizen's Advisory Com mi ttee. The input received from various children and youth 
stakeholders through this public process helped DCYF determine the funding areas to prioritize for 
both the reserved funds (5700,000) and the additional Children's Fund dollars (51,000,000). 

Process Used for Determining Community-Based Organizations to Receive Funding 

DCYF issued a Request for Proposals (RFP) on September 10, 2002. requesting proposals from 
community-based organizations which had one-time expenditure needs such as: operational shortfalls 
due to loss of funding (short term stabilization assistance to maintain services with identified future 
funding sources), agency capacity building (e.g. fundraising, strategic planning), capital expenditures 
(renovations), transportation, furniture/fixtures or one-time events. Availability of the RFP was 
advertised in the Independent, through the Board of Supervisors, on DCYF's website and with a 
mailing to approximately 2,000 youth and children service contacts maintained by DCYF. The RFP 
provided that agencies serving children, youth and families could request up to 575,000 for one-time 
use in the areas detailed above. 

Responses to the RFP were due by September 30, 2002. DCYF received 189 complete proposals in 
response to the RFP, with the requests for one-time funding cumulatively totaling more than S 10 million. la 

1390 Market Street Suite 900 • San Francisco. CA 94102 • Tel 415.554.8990 • Fax 415.554.8965 • TTY 415.934.4847 • www.dcyf.org 

7 



Attachment I 
Page 2 of 2 
order to determine which community-based organizations would be selected to receive grants, DCYF 
utilized a citizen review team. The review team, which included members of the Children's Fund Citizens' 
Advisory Committee and people with expertise in youth services and budgeting, ranked each proposal and 
made consensus recommendations to DCYF. All proposals were scored on: 

S Completion of all required forms and adherence to submission instructions; 

/ Compelling statement of need; 

J Linkage of expense to improved program delivery, 

J Reasonable budget 

DCYF staff reviewed the recommendations of the citizen review team to ensure that there was 
geographic, population and service diversity in the proposed funding allocation. DCYF may also use 
interviews and site visits as evaluation methods prior to awarding contracts. 

DCYF has completed the process of reviewing the 189 proposals received in response to the RFP. "We 
are awaiting the release of the reserved funds before announcing individual grant amounts and entering 
into contract negotiations with the organizations. However, the grant selection process for the 
Children's Fund dollars has been completed in order to ensure this funding can be utilized by 
community organizations at the earliest possible date. 

Request to Release Reserve Funds 

During budget discussions earlier this year, Board of Supervisors members indicated that it was better 
public policy for expenditure decisions to be based on a public process that examined neighborhood 
needs and gaps in services rather than specific add-back requests to individual Supervisors. Thus, 
5700,000 in general fund monies appropriated to DCYF was placed in reserve so that DCYF couVI 
receive additional input from community stakeholders and determine the best use of these funds. As 
requested, DCYF has conducted this process by utilizing the extensive community input that was part 
of the Co mmu nity Needs Assessment and by dete rminin g priority needs with the assistance of the 
Children's Fund Children's Advisory Committee. This process resulted in a decision to fund one-time 
expenditures of community-based organizations based on a competitive RFP process to decide which 
specific organizations would receive funding. 

The recommendation of the Budget Analyst that a detailed list of proposed grantees and grant amounts 
be made public (and open to debate) prior to the release of the reserved funds would appear to defeat 
the policy intent of the Board in seeking to ensure the use of these funds was decided based on a public 
process that broadly examined community needs. The release of a proposed grantee list would likely 
result in individual organizations that have not have been selected for funding through this competitive 
process demanding that their specific requests now be considered outside of the pub he process that has 
already taken place. Reopening the process in this manner would not appear to be supported by the 
policy discussion that occurred when these funds were initially placed on reserve. 

It is also important that there be no further delay in allocating these funds to community-based 
organizations, particularly considering that many of the requests were for funds to ensure that services 
to children and youth would not be cut back during this fiscal year. It is in the best interest of 
maintaining children and youth services that the release of these funds be expedited so that the money 
can get out into the community to meet the immediate needs, such as those articulated by community- 
based organizations at the October Finance Committee meeting. 

Thank you for your assistance in expediting the release of these funds so we can address the critical 
needs in our communities. 



Attachment 1 1 
Page 1 of 4 



List of 189 Organizations Requesting One-Tim 


e Funds from DCYF 


':,;■':; ::.-:._}. ; - ■■■ ]- : r:-^ ^AgerV6y7Na'rn&'.:-- \~l~.--\~: 


■-; :,■■ Request Amount ■ - 


A Home Away From Homelessness 


$45,000! 


African American Art and Culture Complex 


$75,000! 


After School Enrichment Program 


$41,782! 


Alemany Resident Mgmt. Corp. 


$75,0001 


Allen Community Development Corp. 


$75,0001 


Ark of Refuge, Inc 


$75,000j 


Asian Perinatal Advocates 


$75,000! 


Asian Women's Shelter 


$75,0001 


Back on Track 


$51,375; 


Bay Area Girls Center 


$35,000) 


Bay Area Network for Diversity Teaching in Early 


$62,317} 


Bayview Hunter Point Foundation for Com. Imp. 


$57,809! 


SBayview Opera House, Inc. 


$75,000! 


IBernal Heights Neighborhood Center 


$63,275! 


iBooker T. Washington Community Service Ctr. 


$75,000; 


iBrava! For Women in the Arts 


$74,972; 


;Brothers Against Guns, Inc 


$75,0001 


California Community Dispute Services 


$45,5101 


jCalifornia Lawyers for the Arts 


$53,625) 


iCARECEN 


$75,0001 


iCareer Resources Development Center 


$41,159; 


(Center for Human Development 


$44,585i 


JCenter for Young Women's Development 


557,3725 


jCharity Cultural Services Center 


$9,562, 


•Child Care Law Center 


$74,980! 


Children of Lesbians & Gays Everywhere COLAGE 


$55,490: 


iChildren's Day School, Inc. 


S74,1S0! 


jChinatown Community Development Center 


$55,000; 


icivic Center Child Care Corportation 


$75,000! 


SCommunity Alliance for Special Education 


$13,750! 


Community Brd Prgrm Juv. Victim Offender (JVORP) 


$75,000; 


Community Housing Partnership 


$41,000; 


Community Music Center 


$70,056: 


Community Network for Youth Development 


$50,000! 


Community Works 


$40,822,- 


Compass Community 


$24,922! 


Cross Cultural Family Center 


$75,000" 


Donaldina Cameron House 


$56,256| 


Economic Opportunity Council of San Francisco 


$75,000| 


Edgewood Center for Children and Families 


$75,000| 


Ella Hill Hutch Community Center 


$74,842! 


Enterprise for High School Students 


$48,060; 


Everychild Can Learn Foundation 


$74,970: 


Family Restoration House 


$75,000; 


Family Service Agency of San Francisco 


$56,919; 


Family Support Services of the Bay Area 


$29,750| 


Filipino American Arts Exposition 


$67,600) 


Florence Crittenton Services 


$75,000, 


iFranDelJA Enrichment Center 


S75,000i 





Attac 
Page 


hment II 
2 of 4 




jFriends of Recreation and Parks 


1 

i 




$63,169! 


IFriends of St. Francis Childcare Center 


! 




$75,000! 


Gateway High School 


i 




$58,967! 


iGatineU's Tender Loving Care Residence 






$75,0001 


jGirls After School Academy 


| 




$75,000| 


GirlSource, Inc. 






$34,360! 


jGlenridge Cooperative Nursery School 






$7,220! 


!GIide Foundation/Glide Memorial United Methodists 


1 




$74,9551 


iGood Samaritan Family Resource Center 


i 




$43,155! 


iGum Moon Residence Hall 


1 




$44,165! 


Health Initiatives for Youth 






$49,9161 


IHearing Society of the Bay Area, Inc. 


| 




$22,326! 


iHoly Family Day Homes of San Francisco 


i 




$73,1 19j 


Homeless Children's Network 


1 




$74,745| 


'Homeless Prenatal Program (HPP) 


1 




$63,000! 


IHorizons Unlimited of San Francisco, Inc. 


i 




$30,450! 


iHuckleberry Youth Programs 


1 




$50,000! 


IHunters Point Boys & Girls Club 


f 




$62,650! 


jldris Ackamoor and Cultural Odyssey 


! 




$75,000? 


;lndochinese Housing Development Corporation 


| 




$75,000; 


i Infant toddler Consortium 






$53,000! 


'Inner City Youth 


\ 
1 




$75,000| 


iJames Lick Middle School PTSA 


I 




$68,000; 



iJamestown Community Center 



$56,000; 



j Japanese Community Youth Council 



iJewish Family and Children's Services 



$29,00f 



Jewish Vocational & Career Counseling Service 



$75,000, 



$40,000} 



;Juma Ventures 



$75,000; 



■Kai Ming, Inc. 



$75,000j 



;KJds'Turn 



$32,500j 



■Korean American Women Artists &Writers Association 



$70,000! 



iLa case De las Madras 



$20,640: 



ILarkin Street Youth Services 



$75,000; 



Lavender Youth Recreation & Info Center LYRIC 



$64,029; 



[Leadership High School 



$30,000! 



iLegal Services for Children 



$65,555j 



literacy for Environmental Justice 



$75,000t 



I Little Children's Development Center 



$75,000! 



[Men Overcoming Violence (MOVE) 



$50,1001 



jMiraloma Nursery School 



$75,000| 



(Mission Cultural Center for Latino Arts 



$66,8721 



Mission Area Health Associates, Inc. dba MNHC 



$74,998| 



Mission Child Care Consortium 



$75,000! 



Mission Dolores School 



$75,000; 



ission Education Projects Inc. 



$31,485 



Mjssion Housing Develop. Corp. (MHDC) 



$75,000! 



fission Language and Vocational School, Inc. 



$74,857! 



Mission Learning Center 



$76,800! 



ission Neighborhood Centers, Inc. 



$75,0001 



[Mission Youth Soccer League 



$74,8501 



(Moss Beach Homes, Sunset Neigh. Beacon Center 



$34,8901 



(Multicultural Educational, Training & Advocacy 



$8,500; 



'Music in schools today 



10 



$43,948= 



Attachment 1 1 
Page 3 of 4 



Musical Theatre Works 



$7,000; 



I New Direction 21st Century 



$75,0001 



jNICOS Chinese Health Coalition 



$75,000? 



jNihonmachi Legal Outreach ciba Asian Pac, Islander 



$70,499; 



iNihonmachi Little Friends 



$75,000? 



jNorthern California Council for the community 



jNorthern California Service League 



$52,851! 



$55,0001 



jOhlhoff Recovery Programs 



$31,485! 



jOmega Boys Club 



$75,000^ 



|Our Kids First 



$38,4611 



^Pacific News Services' 



$74,7481 



iParent Voices 



$51,2001 



iParents for Public schools of San Francisco 



$20,475: 



IParents helping Parents San Francisco 



$58,228] 



^Philippine Resource Center 



$31,500j 



jPlaytime Center 



$75,000} 



jPolly's Family Support Center 



$75,0001 



■Private Industry Council 



$75,000; 



iPTA Cal. Cngrss of Parents, Teach, Stud. Alvarado 



$40,400 ; 



jRecreation Center for the handicapped 



$32,250? 



• Renaissance Parents of Success 



$75,000! 



[Richmond District Neighborhood Center 
jSF Arts Education Project 



$17,504; 
$75,000; 



;SF Bar Association Volunteer Legal Services Prog. 



$31,655; 



iSF Brown Bombers POP Warner Club, Inc. 



$74,970: 



|SF Conservation Corps 



$62,835: 



ISF Council of Parent Participation Nursery Schools 
ISF Court Appointed Special Advocates 



$5,700! 



$75,000; 



iSF Educational Fund 



S27,254 E 



ISF General Hospital Foundation 



$75,000; 



jSF League of Urban Gardeners (SLUG) 



$74,921! 



iSF School Volunteer 



$4,777; 



ISF Starting Points Initiative 



S74,000; 



SF Study Center 



S58,275i 



ISF Urban Service Project 



$20,000; 



SF Women Against Rape 


$32,340! 


SF Women's Centers, Inc. 


$20,000 


SFHA Housing Corporation 


$74,667^ 


SFSU Foundation Inc. 


$56,250! 


SFSU Foundation, Inc. 


$75,686! 


SFSU Foundation-Mission Science Wrkshops 


$44,461! 


Soul'd Out Productions 


$75,000' 


South of Market Child Care, Inc. 


$72,186! 


Southwest Community Corporation 


$75,000! 


St, Francis Memorial Hospital, Rally Family Visit. 


$53,1651 


St. John's Educational Threshold Center- YouthSoace 


$75,000; 


St. John's Educational Thresholds Center 


$34,9251 


St. Vincent de Paul Society 


$70,670! 


Stem Grove Festival Asoclation 


525,000} 


Streetside Stories, Inc. 


$14,760^ 


Sunset Youth Services 


$71,0001 


Support for Families of Children with Disabilities 


$50,841; 



'Telegraph Hill Neighborhood Association 



11 



$41,193 



Attachment II 
Page 4 of 4 . 



iTenderloin Neighborhood Development Corporation 



$23,570! 



jThe Children's Psychological Health Ctr, 



$27,830! 



;The Community Center Project of San Francisco, Inc 



$71,084! 



The International Institute of San Francisco 



$50,000! 



|The Korean Center, Inc. 



$74,841! 



;The Regents of the University of California 



The San Francisco Child Abuse Prevention Center 



$33,090! 



$66,267| 



jThe Young Scholars Program 



$65,000! 



Hides Center -- Oasis 



$63,585! 



Ifides Center/Infusion-One 



lllnited way of the Bay Area 



$75,000; 



$10,000! 



Vietnamese Youth Development Center 



$34,026! 



Visitacion Valley Community Center 



$74,1001 



Visitacion Valley Job, Education and Training 



$72,638; 



Voice Over Video Network (dbaTILT) 



$56,434! 



Wah Mei School 



$10,000; 



Wajumbe Cultural Institution, Inc. 



$75,0001 



VValden House, Inc. 



$62,892! 



West Bay Pilipino Multi-Service, Inc. 



$36,435! 



Westside Community Mental Health Center, Inc. 



$75,000! 



Whitney Young Child Development Centers, Inc. 



$72,400! 



: World Arts West 



$74,314; 



Wu Yee Children's Center 



$75,000! 



iYMCA - Bayview Hunter's Point 



$75,000! 



jYMCA -- Chinatown 



$75,000! 



■YMCA - Embarcadero 



$24,339! 



iYMCA -- Richmond District 



$45,570! 



;YMCA--Shih Yu-Lang Central of San Francisco 



$51,600; 



jYMCA -- Stonestown Family YMCA 



$73,416! 



:YMCA -- Urban Services 



$53,130; 



|YMCA of San Francisco - Mission Branch 
IYMCA of SF (Buchanan YMCA) 



$65,314! 



$20,000) 



■Young Community Developers, Inc. 



jYouth Guidance Center Improvement Committee 



$75,000} 



$73,863; 



ITotal Amount Requested 
Average Request ($10,810,033/1 89) 



$10,810,033 
$57,196 



12 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Item 3 - File 02-1879 



Department: 



Item: 



Description: 



Department of Administrative Services, Office of Contract 
Administration, Purchasing Division 

Resolution designating the San Francisco Independent to 
be the City's official newspaper for the Type 2 category 
non-consecutive day official advertising, for the period 
commencing January 1, 2003 and ending June 30, 2003. 

Proposition J, which was approved by the San Francisco 
electorate in November of 1994, in part, changed the 
criteria by which the City selects a newspaper to publish 
the City's official advertising. The Purchasing Division 
advises that, under Proposition J, pursuant to Section 
2.81 of the Administrative Code, several criteria are 
considered and used to evaluate bids, on the basis of a 
point system. Bidders are required to submit typeset 
samples and other documentation for evaluation 
purposes. The criteria used for evaluation of bids under 
Section 2.81 includes (1) the cost of advertising in each 
newspaper (the newspaper which bids the lowest price for 
advertising receives additional points), (2) the level of 
circulation of each newspaper (the newspaper with the 
largest circulation receives additional points), (3) the cost 
of the newspaper (any newspaper with a majority of 
circulation that is free of charge to the general public 
receives additional points), and (4) the ownership of the 
newspaper (newspapers which are owned by local, 
minority or women-owned firms receive additional 
points). 

The Cit3 r 's official advertising is divided into two 
categories: 

Tvpe 1 - Advertisements for Two or More Consecutive 
Days: Official advertising which must be published on two 
or more consecutive days, and all official advertising 
which is required to be published in accordance with 
2.103 or 2.108 of the Charter for special meetings of the 
Board of Supervisors and its standing or special 
committees. The official newspaper must publish at least 
5 consecutive days a week for Type 1 official advertising. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Type 2 - Advertisements for Single or Non-consecutive 
Days : Official advertising, which must be published one 
time (other than one-time advertising related to special 
meetings for the Board of Supervisors and its standing 
and/or special committees) or more than one time but not 
more than three times per week for a specified number of 
weeks. The official newspaper must be printed in the City 
at least 3 days a week for Type 2 official advertising. Such 
days do not need to be consecutive days. 

The City currently contracts with the San Francisco 
Independent for Type 2 official non-consecutive day 
advertising. Mr. Mike Ward of the Purchasing Division 
reports that the City's current six month contract with 
the San Francisco Independent, which will expire on 
December 31, 2002, contains an option to extend the 
contract for an additional six months for the period from 
January 1, 2003 through June 30, 2003. The proposed 
resolution designates the San Francisco Independent as 
the official newspaper for Type 2 official advertising for 
the period beginning January 1, 2003 through June 3(J, 
2003. 

Comments: 1. According to Mr. Ward, in response to an Invitation for 

Bids for FY 2002-2003, the San Francisco Independent 
submitted the sole bid for Type 2 advertising. The 
Attachment, provided by the Purchasing Division, 
contains bid data submitted by the San Francisco 
Independent for FY 2002-2003 and the related estimated 
annual costs to the City. As shown in the Attachment, the 
cost per line of typeset to be charged by the San Francisco 
Independent in FY 2002-2003 would be $3.98, which is 
the same per line typeset rate charged by the San 
Francisco Independent in FY 2001-2002. 

2. Mr. Lakey advises that the Board of Supervisors also 
needs to designate an official newspaper for Type 1 official 
advertising for FY 2002-2003. Mr. Ward reports that the 
City has extended its FY 2001-2002 contract with the San 
Francisco Chronicle on a month-to-month basis to provide 
Type 1 official advertising in FY 2002-2003. However, the 
Board of Supervisors has not yet designated an official 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

14 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

newspaper for Type 1 official advertising for FY 2002- 
2003. 

3. According to Mr. Lakey, without designation by the 
Board of Supervisors of an official newspaper for Type 1 
and Type 2 official advertising, the City is not obligated to 
publish official advertisements in any particular 
newspaper. 

4. Mr. Ward states that the current estimated costs in 
FY 2002-2003 for Type 2 official advertising in the San 
Francisco Independent is $507,646, or $129,238 higher 
than the $378,408 projection made in April of 2002. 
According to Mr. Ward, the actual cost for this contract 
for July 1, 2002 through November 26, 2002 was 
$211,519. Mr. Ward estimates that Type I official 
advertising will cost an estimated $101,698 in FY 2002- 
2003, for a total estimated official advertising cost of 
$609,344 in FY 2002-2003, including $101,698 for Type I 
and $507,646 for Type II. 

5. According to Mr. Ward, the San Francisco 
Independent fully complies with all City contracting 
requirements and qualifies to be the official newspaper for 
Type 2 official advertising through the bidding process. 

6. Mr. Lakey has previously advised that the Board of 
Supervisors need not accept the Purchasing Division's 
recommendations for the award of contracts to 
newspapers for official advertising and may designate any 
newspaper, which is qualified under the Charter and the 
Administrative Code. 

Recommendation: Approval of the proposed resolution is a policy matter for the 

Board of Supervisors. 



BOARD OF SUPERVISORS 

mmfiTTT A XT AT VQT 



Attachment 



Exhibit B 



Type 2 Official Advertising - for Non-consecutive Day Publication 
Bid Prices and Estimated Costs 
FY 2001-2002 and 2002-2003 





SF Independent Bid 
2001-2002 


SF Independent Bid 
2002-2003 


Cost Per Line 


3.98 


3.98 


Estimated Annual Cost * 


378,408 


378,408 



* Annual cost estimated using actual payments to calculate monthly average cost and extending to 12 months 



16 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Item 4 -File 02-1894 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Mayor's Office of Housing (MOH) 

Resolution authorizing the issuance and delivery of 
multifamily housing revenue bonds (as defined herein) in 
an aggregate principal amount not to exceed $17,000,000 
for the purpose of providing financing for a multifamily 
rental housing project; approving the form of and 
authorizing the execution of an indenture providing the 
terms and conditions of the bonds; approving the form of 
and authorizing the execution of a bond purchase contract 
providing the terms and conditions for the sale of the 
bonds; approving the form of and authorizing the 
execution of a regulatory agreement and declaration of 
restrictive covenants; approving the form of and 
authorizing the execution of a loan agreement; approving 
the form of and authorizing the execution of an 
intercreditor 1 agreement; approving the form of and 
authorizing the preparation and distribution of an official 
statement relating to the bonds; making low income 
housing findings; ratifying and approving any action 
heretofore taken in connection with the bonds and the 
project; approving and authorizing the execution and 
delivery of any document necessary to implement this 
resolution; and related matters. 

Not to exceed $17,000,000 

Multifamily Housing Revenue Bonds 

This proposed resolution would authorize the City to issue 
Multifamily Housing Revenue Bonds in an amount not to 
exceed $17,000,000 to finance a multifamily rental 
housing development in the Visitacion Valley 
neighborhood of the City. The subject Multifamily 
Housing Revenue Bonds were authorized by the 
California Debt Limit Allocation Committee (CDLAC) in 
September 2002. The proposed resolution would also 
approve the form and terms of documents and official 
notices related to the bond sale and authorize City 



1 Approval of this resolution would create an intercreditor agreement between the funding agencies, 
which are Citibank and the City. An intercreditor agreement provides guidelines regarding how the 
various funding agreements would work together. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



officials to take various actions necessary to carry out the 
sale of the bonds, including authorizing a loan agreement 
between the City and the developers for use of the bond 
proceeds. 

The City's authority to issue the proposed $17,000,000 in 
Multifamily Housing Revenue Bonds comes from Article I, 
Chapter 43 of the Administrative Code, entitled the 
Residential Mortgage Revenue Bond Law, and Section 
9.107 of the Charter. These provisions authorize the City 
to incur bonded indebtedness for the purpose of providing 
mortgage financing for the acquisition, construction, or 
rehabilitation of housing in the City to encourage the 
availability of residential financing for persons and 
families of low or moderate income. Therefore, the City 
can issue Revenue Bonds to provide funding to develop or 
refinance low- and moderate-income multifamily rental 
housing. Bondholders of these Revenue Bonds are repaid 
from payments made by the developer under the Loan 
Agreement, as secured by a Letter of Credit. According to 
Mr. Michael Martin of the City Attorney's Office, these 
Revenue Bonds do not require the City to pledge 
repayment of the bonds, and the City has no legal liability 
with respect to the repayment of the Revenue Bonds. 
With rental developments, the bondholders have only two 
forms of recourse for payment: (1) the project rental and 
mortgage payment revenues, and (2) credit enhancement 
(such as bond insurance or letters of credit) procured by 
the project developers, provided by private parties. 

The general provisions of the sale of the Multifamily 
Housing Revenue Bonds would be as follows: 

• The sale of the bonds is tentatively scheduled for 
December 19, 2002. 

• The bonds would be issued at a variable interest rate 
not to exceed twelve percent and would have 34-year 
term, for a final maturity not later than December 1, 
2036. 

• A draft official statement describing the bonds to be 
issued is included with the proposed resolution for 
approval by the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



The subject Multifamily Housing Revenue Bonds would 
be used to partially finance the acquisition and 
construction of the Carter Terrace Apartments, a 101 -unit 
multifamily rental housing development for low- and very 
low- income persons, consisting of five buildings located at 
522, 550 and 552 Carter Street and 105 Walbridge Street, 
at the corner of Geneva and Carter Streets in Visitacion 
Valley. Currently, the site contains three detached 
bungalow-style motel rooms owned by a neighboring 
motel and a single-family residence. The single-family 
residence and the three detached bungalow-style motel 
rooms will be demolished to construct the new 
multifamily rental housing development. 

The total estimated project costs for the Carter Terrace 
Apartments development will be S28.034,889, as shown in 
Attachment I, provided bj r the MOH. In addition to the 
proposed bond financing of $17,000,000, the total project 
cost of $28,034,889 for the subject 101-unit multifamily 
rental housing development will be financed in the 
following manner: (1) a contribution of $4,000,000 from 
the City's Affordable Housing and Home Ownership Bond 
Program (Proposition A, approved in November of 1996 2 ), 
(2) a $330,000 Affordable Housing Program (AHP) loan 
from the Federal Home Loan Bank Affordable Housing 
Program 3 , (3) $6,644,889 in a second mortgage, income 
from operations and accrued interest, and (4) $60,000 in 
Limited Partner equity. 

The developer, Mercy Housing California (see Comment 
No. 5) is already leasing the site, which is approximately 
3.37 acres, or 146,849 square feet, located at the corner of 
Geneva and Carter Streets. Mercy Housing California 
XXIV is a California limited partnership formed by Mercy 
Housing California for the specific purpose of developing 
and owning the subject multifamily rental-housing 



2 In November of 1996, the voters of San Francisco approved Proposition A, which authorized the 
City to issue $100,000,000 in General Obligation Bonds to: (1) finance the development of rental 
housing affordable to low income households and (2) to provide down payment assistance to low- and 
moderate-income first-time homebuyers (the "Affordable Housing Bonds"). 

3 The Federal Home Loan Bank Affordable Housing Program provides subsidies in the form of grants 
or low-interest loans to community-based housing developers for the development of affordable 
rental and owner-occupied housing. According to Mr. Martin, the City has no legal liability to repay 
the AHP loan. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

project. The general partner will be Mercy Housing West, 
a California non-profit public benefit corporation. 

According to Ms. Anne Romero of the Mayor's Office of 
Housing, 100 of the 101 units (with the exception of one 
manager's unit) would be designated as below-market 
rentals with rents not to exceed 30 percent of the 
qualifying tenants' monthly income. Units are restricted 
to qualifying households in the City earning no more than 
either 30% of area median income, 50% of area median 
income or 60% of area median income (see Comment No. 
2). The development's construction is expected to begin in 
May of 2003 and be completed by December 2004. The 
Carter Terrace Apartments development would contain 
the following unit mix: 29 one-bedroom units; 40 two- 
bedroom units; and 32 three-bedroom units. Unit 
amenities will include: energy efficient appliances, decks, 
or patios for each unit, one parking space per unit and 
internet access wiring. The interior finish will include 
countertops, carpeting in the living areas, vinyl flooring in 
the kitchens and bathrooms, window treatments and 
cabinets. The project will also contain an outdoor 
recreation area with a play structure and benches, and 
will provide over 3,100 square feet of indoor community 
space, including a community room, computer lab, 
laundry room, and offices for management and service 
provisions. As per the zoning requirements for the area, 
parking will be available for 103 vehicles. 

Budget: Attachment I, provided by the MOH, contains budget 

details to support the proposed project expenditures of 
$28,034,889. As previously noted, the funding sources for 
the total project cost of $28,034,889, provided by the 
MOH, are as follows: 

Multifamily Housing Revenue Bonds 

(subject to this request) $17,000,000 

City's Affordable Housing and Home 

Ownership Bond Program (Prop. A) 4,000,000 

AHP Loan 330,000 

Second Mortgage, income from operations 

and accrued interest 6,644,889 

Limited Partner equity 60.000 

$28,034,889 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

Comments: 1. According to Ms. Romero, the MOH expects to issue 

the proposed Revenue Bonds, not to exceed $17,000,000, 
on December 19, 2002. The proposed Revenue Bonds 
would have a variable interest rate, not to exceed twelve 
percent. The proposed resolution states that the proposed 
Revenue Bonds may not be issued initially at an interest 
rate that exceeds twelve percent. Ms. Nadia Sesay of the 
Mayor's Office of Public Finance advises that if the bonds 
were issued at this time, these bonds would have an 
estimated interest rate of 1.5 percent. As stated 
previously, the City Attorney's Office reports that the City 
has no legal liability with respect to the repayment of the 
Revenue Bonds. Mr. Martin further advises that the 
estimated Bond Issuance costs of $422,575 for financing 
and issuing the revenue bonds, as shown in Attachment I, 
will be paid by the developers, including reimbursing the 
City for City Attorney's Office costs and the MOH's costs 
for reviewing and preparing documents related to the 
transaction. Attachment II, provided by the Mayor's 
Office of Public Finance, is a debt service schedule for the 
proposed Revenue Bonds. 

2. Ms. Romero notes that under the regulatory 
agreement between the City and Mercy Housing 
California XXIV and in accordance with the affordability 
standards set forth by the City's Proposition A Bond 
Program loan, the Carter Terrace Apartments 
multifamily housing development will be subject to rent 
limits below the fair market value for a period of 55 years 
from the date of the agreement. The Regulators- 
Agreement between the City and Mercy Housing 
California XXIV requires that the Mercy Housing 
California XXIV rent the 100 of 101 units as follows: (a) 
21 of the 101 total units must be rented to households 
whose income is at 60 percent or below the median 
income; (b) 23 of the 101 total units must be rented to 
households whose income is at 50 percent or below the 
median income; (c) 32 total units must be rented to 
households whose income is at 30 percent or below the 
median income; and (d) 24 of the 101 units must be 
project based Section 8 units or rented to holders of 
Section 8 vouchers, or an equivalent rental subsidy 
program. Even if the subject 34-year bonds were paid off 
early, Mercy Housing California XXIV would be required 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



to maintain 100, out of the total 101 units, at below- 
market rate until 2057. MOH reports that the median 
income in the metropolitan statistical area for the year 
2002 is $68,900 for a two-person household. Therefore, to 
qualify for the units designated for households at 30 
percent or below the median income, renters may earn no 
more than $20,670 for a two-person household. To qualify 
for the units designated for households at 50 percent or 
below the median income, renters may earn no more than 
$34,450 for a two-person household. To qualify for the 
units designated for households at 60 percent or below the 
median income, renters may earn no more than $41,340 
for a two-person household. 

3. According to Mr. Daryl Higashi, the Director of the 
MOH, and as stated in his memorandum (Attachment 
III), the City has previously issued a total of $132 million 
in Multifamily Housing Revenue Bonds. These bonds 
have provided funds for below-market rate mortgages to 
developers of affordable rental housing. As stated in Mr. 
Higashi's memorandum, since 1985, the City's Affordable 
Housing and Home Ownership Bond Program has 
financed the development of 1,319 rental units in the 
City, including 389 units, or approximately 29.5 percent, 
reserved for low-income households. 

4. In June of 2002, the Board of Supervisors authorized 
the MOH to submit an application to the California Debt 
Limit Allocation Committee (CDLAC) for bond issuance 
authority on this project. On August 12, 2002, the Board 
of Supervisors approved the issuance of the subject 
Multifamily Housing Revenue Bonds in the amount of 
$17,000,000 (Resolution 542-02). 

5. Mercy Housing California submitted its request for 
financing in response to the 1999 Family and Supportive 
Notice of Funding Availability (NOFA), issued by MOH. 
Ms. Romero reports that MOH selected Mercy Housing 
California for funding in accordance with the eligibility 
requirements, guidelines and evaluation criteria 
contained in that NOFA and in accordance with the 
MOH/San Francisco Redevelopment Agency Draft 
Underwriting Guidelines. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

22 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



6. According to Ms. Romero, Cahill Contractors, Inc., 
which was selected through an MOH Request for 
Proposals process, will serve as the General Contractor 
for the construction of the project. The design architect 
for the project is Van Meter Williams Pollack, which was 
selected through an MOH Request for Qualifications 
process. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Attachment I 



Carter Terrace 



Construction Period Sources 




Tax-Exempt Bonds during construction 


17,000,000 


Second Mortgage 


6,275,167 




146,276 


AHP 


330,000 


Grant 


4,000,000 


Income from Operations 


223,446 


Limited Partner @ 99.99% 


60,000 


Total Construction Period Sources 


28,034,889 


Construction Period Uses 




Acquisition Closing Costs 


32,592 


Lease Payments during construction 


1,190,480 


Demolition 


70,000 


Relocation 


100,000 


Offsites 


100,000 


Contingency (10% of Construction) 


1,909,488 


Site Improvements 


1,289,266 


Construction - Residential Structures 


17,408,478 


Personal Property in Constr. Contract 


124,770 


Architecture and Engineering Design 


1,287,500 


Survey, Soils, Testing 


186,179 


Permit Fees 


296,814 


Local Development Impact Fees 


194,162 


Utility Fees 


290,541 


Bond Financing and LC Fees through conversion 


414,871 


Construction Loan Interest During Construction 


289,000 


Constr. Loan Interest - C. of 0. to Conversion 


595,000 


Deferred Constr. Loan Int., City Loan 


146,276 


Predevelopment Interest 


12,652 


Construction Lender Charges 


15,000 


Bond Issuance Costs 


422,575 


Trustee Fees prior to conversion 


3,000 


Real Estate Taxes During Development 


378,000 


Insurance During Construe. 


35,000 


Appraisal and Market Study 


13,085 


Environmental Audit 


26,500 


Title, Permanent Loan 


20,000 


Construction Testing 


55,000 


Legal-Land Use 


20,000 


Legal-Real Estate 


50,000 


Legal - Syndication 


35,000 


Tax Credit Allocation Committee Fees 


52,025 


Syndication Consultant 


35,000 


Marketing Expenses 


80,000 


Furnishings 


85,000 


Construction Manager and Utility Consultant 


90,000 


Developer Fee 


357,585 


Soft Cost Contingency 


311,050 


Audit and Project Accounting 


13,000 


Total Construction Period Sources 


28,034,889 



Source: MOH 



Attachment 1 1 



$17,000,000 

City and County of San Francisco 

Variable Rate Demand Multlfamily Housing Revenue Bonds 

Series 2002A 

(Carter Terrace Apartments) 



November 22, 2002 
10:33 AW 



Annual Debt Service and Production 




















Summary 




Dated Data: 




12/18/02 




I2CU8 D«l«: 




12/13/02 














Principal: 




17,000,000.00 














Production: 




17,000,000.00 














Accruad interest: 




0.00 














Original Issue Dlscour 


t: 


0.00 














Yield: 




3.500093% 








Debt 












Bond Yearc 


Dan 


Coupon 


Principal 


Price 


Yltld 


Interest 


Service 


Production 


to Delivery 


06/15/03 










292541,87 


292,541 .67 


0.00 




06/01 AM 


3.500% 


280,000 


100.000 


3.500% 


595,000,00 


875,000.00 


280,000.00 


407,342.47 


OS/01/OS 


3.500% 


290,000 


100.000 


3.500% 


585,200.00 


875,200.00 


290.000.00 


1,119,232.88 


06/01/08 


3.500% 


300,000 


100.000 


3.500% 


575,050.00 


975,050.00 


300.000.00 


2,155,671.23 


06/01/07 


3.500% 


315,000 


100.000 


3 500% 


564,550.00 


879,550.00 


315,000.00 


3.358,931.51 


06/01/06 


3.500% 


325.000 


100.000 


3.500% 


553.525.00 


873,525.00 


325,000.00 


5,332,630,14 


06/01/09 


3.500% 


335,000 


100 000 


3.500% 


542,150.00 


877,150.00 


335.000 00 


7,495,904.11 


06/01/10 


3,500% 


345,000 


100.000 


3.500% 


530,425.00 


B7S.42S.0O 


345.000 00 


10,058,753.42 


08/01/11 


3.600% 


360,000 


100.000 


3.500% 


519,350.00 


878.350.00 


350,000,00 


13.113.465.75 


06/01/12 


3.500% 


370,000 


100.000 


3 500% 


505,750.00 


975,750.00 


370,000 00 


16,613,767.12 


06/01/13 


3,500% 


385,000 


100.000 


3.500% 


492.800.00 


877,300.00 


365.000.00 


20,640,972.80 


06/01/1-1 


3.500% 


400,000 


100.000 


3500% 


479.325.00 


879,325.00 


400,000,00 


25.225.032 1 9 


06/01/15 


3 500% 


410,000 


100.000 


3.500% 


465,325.00 


875,325.00 


410,000 00 


30,323,794.52 


06/01/16 


3,500% 


425.000 


100. 000 


3.500% 


450.575.00 


875,97500 


425,000.00 


36.055,575.34 


06/01/17 


3.500% 


440,000 


1 00.000 


3.500% 


436,100.00 


876,100.00 


440,000.00 


42,419,301.37 


06/01/19 


3.600% 


455,000 


100. 000 


3.500% 


420,700,00 


B75,700.00 


455,000,00 


49,454.972.60 


06/01/19 


3.500% 


470,000 


100.000 


3.500% 


404,775.00 


B74, 773.00 


470.000.00 


57,192,589.04 


06/01/20 


3.500% 


490,000 


loo.ooo 


3.500% 


388,325.00 


878,325X0 


490,000.00 


6S,750,B08.22 


06/01/21 


3.500% 


505,000 


100.000 


3.500% 


371,17500 


876,175.00 


505.00000 


75,076,013.70 


06/01/22 


3.500% 


525,000 


100.000 


3.500% 


353,500.00 


B76,5O0.0O 


525.000 00 


85.295.534.25 


06/01/23 


3.500% 


540,000 


100,000 


3.500% 


335.125.00 


875,125.00 


540,000 00 


96,347,041.10 


06/01/8* 


3.500% 


560,000 


100.000 


3.500% 


3'6.225.00 


676225 00 


560,000.00 


103,365,397.26 


06/01/25 


3 500% 


580,000 


100.000 


3,500% 


296,625.00 


e76,625.00 


sao.ooo.oo 


121,401,123.23 


06/01/26 


3.600% 


600,000 


100 000 


3.500% 


276,325.00 


B76,325,00 


600,000 00 


135.462,219 "8 


06/01/27 


3.500% 


620,000 


100.000 


3.500% 


255,325 00 


875,325.00 


620.000,00 


150,652,694.93 


06/01/28 


3.500% 


645,000 


100.000 


3.500% 


233,625,00 


876,625.00 


646,000.00 


167.0B1 ,630.14 


06/01/23 


3,500% 


665,000 


100.000 


3,500% 


211. 050. 00 


876,050.00 


sss yx oo 


134,665.000 00 


06/01/30 


3.500% 


690.000 


100.000 


3.500% 


187,775.00 


e77,775.00 


690.000 00 


203,640,150.66 


06/01/31 


3 S00% 


715,000 


100.000 


3.500% 


163.625.00 


878,625.00 


716,000.00 


223,597,062.19 


06/01/32 


3.500% 


740,000 


100.000 


3,500% 


138,600.00 


878,600.00 


740,000.00 


245,907,821.92 


06/01/33 


3.500% 


765,000 


100.000 


3.500% 


112,700.00 


877.700.00 


765,000.00 


259,120.410.36 


06/01/34 


3.500% 


790,000 


100.000 


3.500% 


85,925 00 


675,925 00 


79C.000.00 


293,934.649 32 


06/01/35 


3.500% 


820,000 


100 000 


3.500% 


56,275.00 


876,275 00 


620,000.00 


320.613,506.85 


06/01/36 


3.500% 


845,000 


100.000 


3.500% 


29.575.00 


974,575.00 


S45 OOC.OO 


348.901328*7 






17.000.000 






12.225,315,2 


29.??S.318.67 


17.000.000.00 


3.417.394.599.04 



MullFamily Housing . Carter Terrace Apis 2002A.H611/22'200210:33 AM 



?5 



Attachment III 
MAYOR'S OFFICE OF HOUSING Page 1 of 2 

CITY AND COUNTY OF SAN FRANCISCO 

WILLIE LEWIS BROWN, I 

mi 

DARYL HIGASffl 
DIRECTOF 

MEMORANDUM 

November 5, 2002 

To: The Honorable Aaron Peskin, Chair, Finance Committee 

The Honorable Sophie Maxwell 
The Honorable Chris Daly 




From: Darvl Hisashi 



W 



Subject: Resolution Authorizing Issuance of Multifamily Housing 

Revenue Bonds (Carter Terrace Apartments) 



Requested Action: The Mayor's Office of Housing respectfully requests that the Finance 
Committee, at its meeting on Wednesday, November 20, consider the attached resolution 
authorizing issuance of Multifamily Housing Revenue Bonds for Carter Terrace Apartments. 

Background: Since 1985, the City and County of San Francisco has issued a total of 

$132 million in Multifamily Housing Revenue Bonds. These bonds provided funds for below- 
market rate mortgages to developers of rental housing, with a portion of the units reserved for 
low income households. Since 1985, the program has financed development of 1,319 rental units 
in the City, including 389 units reserved for low- income households. 

Repayments of these mortgages are used to make principal and interest payments on the bonds. 
The bonds are not "full faith and credit 1 obligations of the City and County of San Francisco; 
bondholders are guaranteed payment only from the mortgage revenues. 

This resolution authorizes the City to issue $17,000,000 of bonds for the financing of Carter 
Terrace Apartments at 522, 550, 552 Carter Street and 105 Walbridge Street. In June 2002, by 
Resolution 443-02, the Board of Supervisors authorized an application to the California Debt 
Limit Allocation Committee (CDLAC) for bond issuance authority on this project. In August 
2002, by Resolution 542-02, the Board of Supervisors certified the TEFRA Public Hearing 
Approval. The development will be a residential rental project comprised of 5 apartment 
buildings and 1 commons building containing 101 units, with all of the units (except one 
manager's unit) set aside as below-market rate rentals. The development is expected to 
commence construction in approximately May 2003 and be completed December 2004. 

The developer of the property is Mercy Housing California, a non-profit housing developer with 
extensive development experience in providing housing for low income San Franciscans. Mercy 



Attachment III 
Page 2 of 2 



Multifamily Housing Revenue Bonds (Carter Terrace Apartments) 
November 5, 2002 
Pase 2 



Housing California XXTV is a California Limited Partnership formed for the specific purpose of 
owning the project. The general partner will be Mercy Housing West, a California nonprofit 
public benefit corporation. In addition to bond financing, the development will financed by a 
loan and grant from the City's .Affordable Housing and Home Ownership Bond Program 
(Proposition A), loan from the State of California Multifamily Housing Program, loan from the 
Federal Home Loan Bank Affordable Housing Program, and an investment by a limited partner 
who will benefit from low income housing tax credits generated by the development. 

The project development budget includes all costs of the transaction: bond counsel and 
financial advisor fees, and the City Attorney costs. 

Under the City's Prop A Bond Program loan, the development will be subject to rent regulation 
for a period of 55 years, which is longer than the typical 15 to 30 year affordability of revenue 
bond-financed developments. It is expected that the nonprofit entity will acquire the property 
from the partnership in approximately 15 years, thus ensuring the permanent affordability of the 
development. 

Fiscai Impact: The bonds and related documents clearly state that the bondholders may 

look only to the revenues of the project and to the credit enhancement provider for payments of 
principal and interest on the bonds. Therefore, the City will not be directly or indirectly liable for 
payments on the housing revenue bonds. 

Additional Information: The resolution will be introduced at the Board of Supervisors on 
Tuesday, November 12, 2002. Bond related documents to be approved by reference in the 
resolution are included in the file. Please contact Joel Lipski at 252-3 119 if you have any 
questions. 



Cc: Harvey Rose, Budget Analyst 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

Item 5 - File 02-0663 

Note: This item was continued by the Finance Committee at its meeting of July 31, 
2002 to provide additional time for the Department of Parking and Traffic to 
develop performance measures for Parking Garage Operators under contract 
with the Department of Parking and Traffic. 



Department: 
Item: 



Description: 



Department of Parking and Traffic (DPT) 

Ordinance amending Section 17.11(a) of the San 
Francisco Administrative Code to reenact the original 
authorization of the Parking Authority and Parking and 
Traffic Commission to utilize a Bid/Request for Proposal 
(RFP) process for the awarding of all leases and 
management agreements for the use or operation of City- 
owned parking facilities, through June 1, 2007. 

On April 26, 1999, the Board of Supervisors approved an 
ordinance to amend Section 17.11 of the Administrative 
Code to (1) remove the prior provision requiring that the 
DPT obtain Board of Supervisors approval prior to 
advertising bid or Bid/RFP documents pertaining to the 
awarding of leases and management agreements to 
parking operators for the operation of parking facilities, 
and (2) authorizing the DPT until December 1, 2000 to 
issue Bid/RFPs in lieu of utilizing formal competitive 
bidding procedures for awarding leases and management 
agreements to parking operators for City-owned parking 
facilities (File 98-1935). Specifically, Section 17.11(a) of 
the Administrative Code enabled DPT to issue Bid/RFP's 
to award leases and management agreements to parking 
operators for operation of City-owned parking facilities 
when the Parking and Traffic Commission determines 
that such a Bid/RFP process is in the best interest of the 
City. In January of 2001, the Board of Supervisors 
approved an ordinance to extend the sunset provision for 
use of the Bid/RFP process by 18 months, from December 
1, 2000 to June 1, 2002 (File 00-1798). 



The current provisions of the Administrative Code state 
that "the authority given to the Parking Authority to use 
a Bid/RFP Process shall sunset on June 1, 2002, unless 
the Board of Supervisors, by ordinance, continues this 
authorization." Additionally, the current ordinance states 
that "the Bid/RFP Process shall be reviewed by the 

Board of Supervisors 
Budget Analyst 
28 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

Parking Authority to determine if the utilization of the 
Bid/RFP Process has been in the best interest of the 
public, and a report shall be submitted to the Board of 
Supervisors." As stated by Mr. Szeto in the attached 
memorandum (Attachment I, page 2), there are 
advantages and disadvantages for both the formal 
competitive bidding process and the Bid/RFP processes. 
Mr. Szeto states that "While the short-term effects of the 
Bid/RFP have thus far demonstrated positive results, we 
are requesting extension of the authorization to use a 
Bid/RFP process until June 1, 2007 to evaluate the long- 
term effects... After this proposed extension period, ending 
June 1, 2007, we should have sufficient data to fully 
determine the degree of success of the Bid/RFP process 
and its effectiveness in achieving desired end results that 
are truly 'in the best interest of the City.'" 

The proposed ordinance would amend Section 17.11(a) of 
the Administrative Code to reenact the original authority, 
which sunsets on June 1, 2002, permitting the DPT to 
award parking operator agreements on the basis of a 
Bid/RFP process rather than on the basis of utilizing 
formal competitive bidding procedures. The proposed 
ordinance would amend the original sunset date of June 
1, 2002 to establish a new sunset date of June 1, 2007. 
According to Mr. Szeto, the DPT has not awarded parking 
operator agreements on the basis of a Bid/RFP process 
from June 1, 2002 to date. 

Comments: 1. The Finance Committee continued the item on July 31, 

2002 requesting that the DPT develop performance 
measures for parking garage operators under contract with 
DPT. In response to the Finance Committee, the 
Department of Parking and Traffic has submitted the 
attached memorandum (Attachment II) which further 
explains their justification for continuing the Bid/RFP 
process and provides six recommended performance 
measures to be employed by DPT to evaluate the parking 
garage operators. On page 3 of the memorandum 
(Attachment II) provided by Mr. Szeto, Mr. Szeto states 
that, "Since the short-term results are positive and because 
both the Budget Analyst and the Department agree that 
defined performance measures are necessary to truly 
continue to gauge the benefits of the Bid/RFP process, the 

Board of Supervisors 

Budget Analyst 

29 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Department has compiled six performance measures to aid 
in this analysis. The Parking Authority staff, as a group, 
proposes to use the attached Performance Measure Rating 
Sheet to evaluate each garage operator on six essential 
areas of garage management as an on-going measure of 
their performance." 

2. The Budget Analyst has reviewed the DPT's proposed 
performance measures and has noted that the DPT has not 
sufficiently developed specific measures of outcome that can 
objectively and quantitatively evaluate the performance of 
the parking garage operators. The DPT agreed with the 
Budget Analyst that the DPT should utilize specific, 
quantifiable, outcome-based performance measures such as: 

• the number of entries on the compliance checklist, 
pertaining to regularly scheduled maintenance, that are 
completed on schedule; 

the monthly number of employee late days recorded; 
the number of confirmed incidences of employee 
rudeness or misconduct; 

the number of business days before a garage operator 
responds to a City request; 

the number of follow-up telephone calls before a City 
request is satisfied; 

the number of vehicles annually per FTE for self park 
and valet operations; 

the number of comment cards ranking the garage 
operator better than average as a percentage of total 
comment cards received; and, 

the number of damage claims filed by parking garage 
customers. 

3. Although the DPT agreed with the Budget Analyst that 
specific, quantifiable outcome-based performance measures 
should be utilized, the DPT stated that the DPT currently 
has insufficient staff to administer outcome-based 
performance measures as suggested by the Budget Analyst. 
DPT has instead developed a performance evaluation 
approach, based on a more subjective methodology, 
utilizing six performance measures which are shown on 
pages 3 and 4 of Attachment II. DPT proposes to measure 
the performance of a parking garage operator by utilizing a 
1 through 10 ranking system, as described in Attachment 

Board of Supervisors 

Budget Analyst 

30 



Memo to Finance Committee 

December 4. 2002 Finance Committee Meeting 

II. For example, the DPT will rate the garage operator on 
employee appearance, courteousness, effectiveness, skill 
and willingness to assist the public. Instead of the outcome- 
based performance measures suggested by the Budget 
Analyst which rely on actual outcomes or results to 
evaluate the parking garage operator, the 1 through 10 
ranking system proposed by the DPT would be based on the 
impressions and opinions of DPT staff to evaluate the 
parking garage operators. 

4. According to Mr. Szeto, DPT will implement quantified, 
outcome-based performance measures once a vacant 1.0 
FTE Deputy Director position is filled. Mr. Szeto states 
that the position will not be filled in FY 2002-2003 because, 
due to budget constraints, DPT did not request funding for 
this position in the FY 2002-2003 budget. Mr. Szeto 
anticipates filling the vacant position in FY 2003-2004. The 
Budget Analyst questions the DPT's contention that 
additional personnel are needed by the DPT to administer 
specific quantified outcome-based performance measures. 

5. In the professional judgement of the Budget Analyst, the 
utilization of specific, quantified outcome-based 
performance measures would improve DPT's efforts to 
evaluate whether or not the Bid/RFP selection process is 
better than the formal competitive bidding process. 

Recommendation: Approval of the proposed ordinance is a policy decision for 

the Board of Supervisors. 



Board of Supervisors 
Budget Analyst 

31 



JUL. -24' 02 (WED) 11:1b UITY t UU Ut- S. b. KAKKlNti UtKI 



SAN FRANCISCO 



'tL:<H3 031 ^801 Autacnment 1 
Page 1 of 15 
City and County of San Francisco 




DEPAHTMENT OP PAHKINO * TRAFFIC 



WILUIE LEWIS BROWN. JR., Mayor 

FRED M. HAMOUN, EXECUTIVE DIRECTOR 

RONALD SZETO. ACTING DIRECTOR, PARKING AUTHORITY 




MEMORANDUM 



DATE: July 9, 2002 

TO: The Honorable Members 

Finance Commitl.ee 
Board of Supervisors 

FROM: Ronald Szeto Q^ 

Acting Director 
Parking Authority 
Department of Parking and Traffic 

SUBJECT; Amending Section 17.11(a) of the San Francisco Administrative Code, 
Reauthorizing the Department of Parking and Traffic and the 
Parking Authority Commission to Utilize a Bid/RFP Process Until 
June 1,2007 



Background: 

On April 26, 1999, the Board of Supervisors adopted Ordinance Number 104-99, File 
Number 981935 amending Administrative Code Section 17.1 1(a). The amendment 
shortened the garage management agreement bid process by removing the requirement to 
obtain Board of Supervisors approval by ordinance before advertising bid (or Bid/RFP) 
documents, 

The amendment also authorized the Parking and Traffic Commission and the Parking 
Authority Commission to solicit professional parking operators with a Bid/RFP process 
instead of the competitive bid process when the Commission determines that the Bid/RFP 
process is in the best interest of the City. This authorization to utilize the Bid/RFP 
process expired on December 1 , 2000. On January 16, 2001 , the Board of Supervisors 
adopted Ordinance No. 3-01, File No. 001798, extending the authorization to utilize the 
Bid/RFP process until June 1, 2002. 



(415) 6S4-PARK FAX (416! 554-9834 



25 Van Nasi) Avenue. Sulla 420 

32 



San Franciico, CA 841G2-4578 



-RON : PARKING AUTHORITY PHONE NO. : 354 9395 ^5J;|. c ,^eaL x 

Finance Committee 
July 9, 2002 

Pursuant to the authorization to utilize a Bid/Rf P process, the Parking Authority is 
required to report back to the Board of Supervisors on the Parking Authority's findings as 
related to the effectiveness of the Bid/RFP process, and make a recommendation to 
remove, extend or permanently retain the authorization to use a Bid/Rf P process. 

Since the January 16, 2001 Bid/RFP utilization authorization, we have conducted: 

a) One competitive bid (the North Beach and Vallejo Street Garages joint 
management agreement) 

b) One Bid/RFP with a management fee that covers operating expenses (the 
Performing Arts Garage) 

c) One Bid/RFP with an annual budget that covers operating expenses (the 
Golden Gateway Garage), and 

d) Two assignments (the Moscone Center Garage and the Polk-Bush Garage). 

Additionally, two not-for-profit parking corporations successfully conducted Bid/RFPs 
with an annual budget covering operating expenses (the Fifth and Mission Garage and the 
Ellis-O'Farrell Garage). Lastly, we are currently evaluating Bid/RFP proposals received 
for the joint management agreement for the St. Mary's Square and the 16 & Hoff 
Garages. 

Objective 

The purpose of this report is to provide information and analysis of the Bid or Bid/RFP 
processes conducted since December 1, 2001. The objective of utilizing the Bid/RFP 
process is to enable selection of parking firms that will provide the greatest benefit to the 
City at a reasonable cost. When speaking of parking garages, the Depanment of Parking 
and Traffic defines "the best interest of the City" as the net benefits to the City and 
County governance, the garage patrons, and the neighboring residents, businesses and 
institutions. As opposed a to private business venture, success it not determined solely by 
the "bottom line". Rather, in government, we must go a step further and give meaningful 
consideration to the broad range of benefits to our City's various communities, in 
addition to the "bottom line". 

Findings 

There are advantages and disadvantages for both the "straight bid" (low bid) and 
Bid/RFP processes (see attachment Pros and Cons). While the short-term effects of the" ' 
Bid/RFP have thus far demonstrated positive results, we are requesting extension of the 
authorization to use a Bid/RFP process until June 1, 2007 to evaluate the long-term y/ 
effects. Each management agreement awarded or assigned during the first extension 
period, ending June 1, 2002, is discussed in detail below. Also provided arc the 
attachments for the Garages ' Performance Results, and the Management Agreement 
Schedule and Selection Process. After this proposed extension period, ending June 1, 
2007, wc should have sufficient data to fully determine the degree of success of the 
Bid/RFP process and its 



2 
33 



FROM :' PARKING AUTHORITY phone NO. : 554 9895 Attacruneiit I 

Page 3 of ~T5 

Finance Committee 
July 9,2002 

effectiveness in achieving desired end results that are truly "in the best interest of the 
City." 

Performing Arts Garage (Bid/RFP) 

The Performing Arts Garage was the first Parking Authority garage management 
agreement awarded via the Bid/Rf P process. Under the terms of this Bid/RFP. proposing 
parking firms were required to submit proposals which included profit and operating 
expenses included with their proposed management fees (bids). Upon completion of 
analysis and grading by the review panel, the management agreement was awarded to the 
highest-ranking firm. This firm's proposed management fee was the second lowest 
among all bidders. This bid was S926.93 per month higher than die overall lowest bid 
and $5,43 1 .65 per month less than the bid received from the third-ranked firm. 

Beneficial Observations 

• We noticed a smooth transition during changeover of management period. 

• On-site management team, management approach and marketing efforts are 
according to the Bid/RFP submittals and the short-term results are positive; services 
and revenues are met or exceeded. 

• Staff has confidence in the parking firm. 

• Staff is spending time to increase services and revenues instead of spending time with 
contract compliance issues. 

• Implemented valet parking during special events to accommodate more patrons. 

• Implemented a new special event exiting procedure to greatly reduce the exiting 
times. 

• Average monthly transient volume has increase by 1,394 or 12.4 % in the first 15 
months of operation compared to the 12-month period prior to the commencement of 
the new management agreement. 

• Average monthly gross revenues have increased by S 14,574 or 1 1 .9 % in the first 1 5 
months of operation compared to the 12-month period prior to the commencement of 
the new management agreement. 

• Average monthly net revenues to the City have increased by $1,932 or 2.8 % in the 
first 15 months of operation compared to the 12-month period prior to the 
commencement of the new management agreement. 

• Average monthly parking tax collected have increased by $3, 1 73 or 1 3 .3 % in the 
first 15 months of operation compared to the 12-month period prior to the 
commencement of the new management agreement. 

Non-Ben eficial Observations 

• Entire Bid/RFP process took more effort and more time to complete. 

• Did not receive the lowest bid. The Parking Authority pays $926.93 more each 
month compared to the lowest bid. 

• The highest-ranking firm could have bid a mathematical maximum of $26,222.49 per 
month ($219.64 per month greater that their actual bid and $1,146.57 per month 



FROM : PARKING AUTHORITY PHONE NO. : 554 9895 AttachnieiV I 

Page 4 of T5 

Finance Committee 
Julv 9, 2002 



• greater than the lowest bid) and still would have been awarded the management 
agreement. 

Summary 

The short-term evaluation indicates that we have achieved our objective by awarding the 
management agreement to a firm that increased accommodations and quality of services 
to our patrons, provided greater benefits to the City and generated more revenues to the 
City (average increase of S5,105 in net revenues and parking taxes per month) despite the 
downturn of die economy and a substantial increase in salaries and benefits. 

Golden Gateway Garage (Bid/RFP with operatine expense reimbursements) 

The Golden Gateway Garage was the first City garage management agreement awarded 
through a Bid/RPP process. Initially, we required the parking firms to submit 
management fees (bids) that included profits and operating costs together with their 
proposals. However, upon receipt of the proposals, we were not convinced nor assured 
that the highest-ranking firm would be capable of sustaining the quality of services 
specified in the management agreement. We were also unwilling tc recommend award of 
the management agreement to the firm with the next highest score because it would have 
cost the City approximately 5250,000 more per year. 

The Parking and Traffic Commission subsequently rejected all proposals and approved 
Bid/RFP documents that incorporated reimbursements for operating expenditures. We 
feci that this combination of Bid/RPP and reimbursements yielded the best short-term 
process for complex operations. First, the Bid/RPP criteria ensures that the firms submit 
low management fees (bids) and that the firms are adequately prepared for managing the 
garage according to our specifications. Secondly, the reimbursement approach ensures 
that the successful parking firm would have sufficient funds to provide the specified 
services. Thirdly, the parking firms can submit aggressive management fees (bids) 
without compromising services because the fees reflect only overhead and profits. 

Beneficial Obsecrations, 

• We noticed a smooth transition during changeover of management period. Please 
note that the out-going firm is also a joint venture partner of the new management 
team. 

• Services are never compromised due to aggressive bids (management fees) anymore 
because funding for the services are reviewed, approved and reimbursed by the City 
and not by the parking firm from their management fee. 

• On-site management team, management approach and marketing efforts are 
according to Bid/RFP submittals and the short-term results are positive; services and 
revenues are expected. 

• Staff is confident of the parking firm. 

• Saved staff time with fewer (none to date) management agreement compliance issues. 



4 35 



FROM': PARKING AUTHORITY PHONE NO. : 554 9895 Attachment I 

Page 5 of T5 

Finance Committee 
July 9, 2002 

• Average monthly net revenues to the City have increased by S 1 8,062 or 6. 1 % in the 
first 4 months of operation compared to the same period of the prior year by 
increasing the monthly parking volume by 64.5% and controlling expenses. 

Non-Beneficial Observations 

• Entire Bid/RFP process took more effort and more time to complete. 

• Staff time required for review and approve expenditures. 

• The form of the monthly report took longer than expected to complete. 

• Did not award the management agreement to the lowest bidder, costing the City S 1 .00 
per month more. Under this Bid/RFP process, the highest- ranking firm could have 
charged the City S999 per month more and would have still ranked first. 

• Average monthly gross revenues have decreased by SI, 992 or 0.4 % in the first 4 
months of operation compared to the same period of the prior year. 

• Transient volume has decrease by 14,114 or 15.1% 

Summary 

The short-term evaluation indicates that we have achieved our objective. The quality of 
service, the management team, management approach, and marketing strategies have 
been the bright spots of this management agreement. For the first four months of the 
management agreement, the strong management team generated over $72,000 more in 
total net revenues to the City then in the same period in the prior year despite the 
economic downturn. Financial success was achieved through higher monthly parking 
accommodations from nearby hotel demand that offset the decline in transient patrons. 
Moreover, the management team successfully controlled operating expenses despite labor 
agreement mandated salary and benefit increases. 

North Beach Garage and Valleio Street Garage flow bid) 

We used a low bid process for the award of the management agreement for management 
of these two garages because the operation was fairly straightforward for both garages; 
one lane in and one lane out. The lowest bidder withdrew their bid. 

Beneficial Observations 

• Combining two garages, in close proximity, into one management agreement to save 
on a number of duplicate labor and overhead expenses. 

• We noticed a smooth transition during changeover of management period. 

• On-site management team is strong and the short-term results are positive. 

• Average monthly gross revenue has increased by 536,1 72 or 36.4% for the first 5 
months of operation compared to the same period of the prior year. 

• Average monthly parking tax collected has increased by 57,350 or 37.2% for the first 
5 months of operation compared to the same period of the prior year. 

• Average monthly net revenue to the City has increased by 521 ,007 or 67.4% for the 
first 5 months of operation compared to the same period of the prior year. 



36 



FROM : PARKING AUTHOR ITY PHONE NO. : 354 S895 Attach^ I 

Finance Committee 
July 9, 2002 

• Transient vehicle accommodation has increased by 8,41 1 or 51.6% for the first 5 
months of operation compared to the same period of the prior year. 

• Staff spent less time during the bidding process. 

• Staff spends minimal time on operating expenses. 

• Staff is confident of the parking firm. 

Non-Beneficial Observations 

• Taking more time to implement a marketing strategy as compared to a Bid/RPP 
management agreement. 

• Staff spends more time planning and reviewing the management approach that would 
have otherwise been submitted under the Bid/RFP process. 

• Under this straight bid process, the successful parking firm could have charged the 
City S 1,126.12 more each month and would have still been awarded the contract. 

Summary 

The short-term evaluation indicates that we have achieved ouj objective by awarding the 
management agreement to a firm that increased accommodations and quality of services 
to our patrons, provided greater benefits to the City and generated more revenues to the 
City (average increase of 528,357 in net revenues and parking taxes per month) despite 
the downturn of the economy and a substantial increase in salaries and benefits. 

Moscone Center Garage (assignment) 

The Parking Authority Commission assigned the management agreement to the joint 
venture of GEM Parking and Professional Parking System (both HRC certified firms). 
The assignment was conducted because: a) the operator requested to be released from the 
management agreement, and, b) the assignment would allow staff to prepare bid 
documents while still keeping the garage operating. We may use a straight bid process 
for this garage in the future because the operation is fairly straightforward. 

Beneficial Observations 

• Efficient re-assignment of the management agreement. 

• Have new joint venture parking firms in the interim basis. 

• Increased monthly parking accommodation by 270 patrons or 7.1% (12-month 
comparison ending June) to generate as much revenue as possible durins this 
economic downturn. 

Non-Beneficial Observations 

• Average monthly gross revenue has decreased by SI 6,898 or 8.0 % for the first 12 
months of operation compared to the same period of the prior year. 

- Average monthly parking tax collected has decreased by $3,2 12 or 7.7 % for the first 
12 months of operation compared to the same period of the prior year. 

• Average monthly net revenue to the City has decreased by $ 1 3,404 or 1 1 .2 % for the 
first 12 months of operation compared to the same period of the prior year. 



6 37 



FROM' : PARKING AUTHORITY PHONE NO. : 554 9S95 Attachiaent I 

Page 7 of 15" 



Summary 

Although the performance of the Garage has been greatly affected by the economic 
downturn, the joint venture parking firms have done a reasonable job in generating 
revenues when possible. Also, the assignment allowed staff to concentrate on other 
management agreements during the interim period. 

Polk-Bush Garage (assignment) 

The Parking Authority Commission assigned the management agreement to one of the 
principals (NM Parking-HRC certified) of the second lowest bidder for the prior bid 
solicitation. The assignment was conducted because: a) the original operator requested 
termination of its management agreement due to debarment by the Airport Commission, 
and, b) the assignment would allow staff to prepare bid documents while still keeping the 
garage operating. Wc are planning to use a straight bid process for this Garage when the 
assignment terminates on the date the original contract terminates. 

Beneficial Observation!; 

• Re-assignment of the management agreement 

• Have new parking firm in the interim basis. 

• Accommodations and revenues to the City are the same levels as the prior year for the 
first 10 months of operation despite the economic downturn. 

N on- Beneficial Observations 

• None to date. 

Summary 

In the fust 10 months of operation, the parking firm has sustained prior year 
performances whereas many other businesses have been greatly affected by the economic 
downturn. Additionally, the assignment allowed staff to concentrate on other 
management agreements during the interim period. 

Fifth and Mission Garage (Bid/RFP with operating expense reimbursements) 

The City of San Francisco Downtown Parking Corporation was the first not-for-profit 
parking corporation to award a management agreement via a formal bid process of any 
kind in the last 30-40 years. 

The Parking Corporation awarded the Fifth and Mission Garage management agreement 
with operating expense reimbursements via a Bid/RFP process. As mentioned in the 
Golden Gateway section of this report, we feel that the combination of Bid/RFP and 
reimbursements yielded the best short-term process for complex operations. First, the 
Bid/RFP criterion ensures that the firm is adequately prepared for managing the garage 
according to our specifications. Secondly, the reimbursement approach ensures 
that the successful parking firm would have sufficient funds to provide the specified 
services. Thirdly, the parking firms can submit aggressive management fees (bids) 
without compromising services because the fees reflect only overhead and profits. 



'38 



FROM : PARKING .AUTHORITY phone NO. : 554 9895 Attachment I 

Page a of 15 



Beneficial Observations 

• We noticed a smooth transition during changeover of management period. 

• Services are never compromised due to aggressive bids (management fees) because 
funding for the services are reviewed, approved and reimbursed by the Corporation 
and the City, and not by the parking firm from their management fee. 

• On-site management team, management approach and marketing efforts are 
according to Bid/RFP submittals. 

• Staff is confident of the parking firm. 

• Saved staff time with fewer contract compliance issues. 

• Net revenue to the City has increased by over SI. 5 million or 26.9 % in the first 12 
months of operation compared to the same period of the prior year. Please note that 
this increase in net revenues is realized because of the elimination of the gross receipt 
tax and not an increase in parking revenues. 

Non-Beneficial Observations 

• Did not award the management agreement to the lowest bidder, costing the 
Corporation 52,166.66 more each month. 

• Entire Bid/RF P process took more effort and more time to complete. 

• Staff and Corporation time required to review and/or approval expenditures. 

• Average monthly gross revenues have decreased by S92,057 or 7.2 % in the first 12 
months of operation compared to the same period of the prior year. 

« Average monthly parking tax collected have decreased by $20, 1 1 5 or 8.4 % in the 
first 12 months of operation compared to die same period of the prior year. 

» Average monthly transient volume has decreased by 8,805 or 5 .4 % in the first 1 2 
months of operation compared to the same period of the prior year. 

• Monthly parking volume has decreases. 

Summary 

The short-term evaluation indicates that we have not achieved our objective to the fullest. 
The quality of service, the management team, management approach and marketing 
strategies have been the bright spots of this management agreement during the economic 
downturn. Despite these best efforts of the parking firm, the revenues for this facility do 
reflect the downturn of the economy, unlike many of the previously mentioned garages 
However, at this time, we do not have any data indicating the decrease in revenues are 
attributable to the process used to award the management agreement. Further, it is more 
likely attributable to the garage's South of Market location and the precipitous decline in 
technology and trade show activity in the vicinity of the garage. The long-term study 
should further reveal the strengths and weaknesses of the parking firm and the Bid/RFP 
process. 



8 
39 



FROM : PARKING fiUTHORITY phone NO. : 554 9S95 Attachment I 

J^age y of T5 

Finance Committee 
July 9, 2002 

£Uis-0'FarrelI Garage (Bid/RFP with operating expense reimbursements ). The City of 
San Francisco Ellis-O'Farrell Parking Corporation was the second not-for-profit parking 
corporation to successfully award a management agreement via a formal Bid/RFP 
process. 

The City of San Francisco Ellis-O'Farrell Parking Corporation awarded the Ellis- 
O'Farrell Garage management agreement with operating expense reimbursements via a 
Bid/RFP process. As mentioned above, we feel that the combination of Bid/RFP and 
reimbursements yields the best short-term process for complex operations. First, the 
Bid/RFP criteria ensure that the firm is adequately prepared for managing the garage 
according to our specifications prior to the award of the contract. The successful parking 
firm conducted employee evaluations and transition meetings prior to managing the 
Garage. Secondly, the reimbursement approach ensures that the successful parking firm 
would have sufficient funds to provide the specified services. Under this contract, the 
parking firm is able to reduce operating cost by claiming all valet related damages 
through their own insurance and by reconfiguring the rooftop spaces for self parking. 
Thirdly, the parking firms can submit aggressive management fees (bids) without 
compromising services because the fees reflect only overhead and profits. Finally, the 
highest-ranked firm also submitted the lowest management fees. 

Beneficial Observations 

• Awarded the management agreement to the highest-ranking firm that also submitted 
the lowest bid. 

• We noticed an excellent transition during the changeover (of parking firms) period. 

• Services are not compromised due to aggressive bids (management fees) because 
funding for the services are reviewed, approved and reimbursed by the Corporation 
and the City, and not by the parking firm from their management fee. 

• Received the lowest bid. 

• On-site management team, management approach and marketing efforts have met or 
exceeded efforts as written in the Bid/RFP submittals. 

• Staff is confident of the parking firm. 

• Saved staff time with fewer contract compliance issues. 

• Parking revenues, parking taxes, net revenues, transient volume and monthly parking 
volume have all increased in the first two months of operation compared to the same 
period of the prior year. Total net revenue to the City increased by $24 845 or 
29.3 %. 

Non-Beneficial Observations 

• Entire Bid/RFP process took more effort and more time to complete. 

• Staff and Corporation time required to review and/or approval expenditures 
- Under this Bid/RFP process, the highest-ranking firm could have charged the 

Corporation 51,416.66 more each month and would have still ranked first 



9 
40 



FROM' : PARKING AUTHORITY PHONE NO. : 554 S8S5 Attachment I 

" Page 10 of "15 

Finance Committee 
July 9. 2002 

Summary 

The short-term evaluation indicates that we have achieved our objective to die fullest. 
The Corporation received the lowest bid and quality service. The management team, the 
management approach and the marketing strategies have been excellent while revenues 
have increased. The long-term study should reveal the strengths and weaknesses of the 
parking firm and the Bid/RFP process. 

Conclusion 

Analysis of the short-term results indicates that the objectives of the Bid/RPP process 
have been achieved. The proposal process has enabled us to select parking firms that are 
the most appropriate for specific garages. This has been achieved by the evaluation of 
specific garage management and operational skills uniquely crucial to the operation each 
individual facility. In other words, the Bid/Process has allowed the Department to select 
parking firms that have the highest chance to attain the greatest degree of success. 

Success is measured by fulfillment of our definition of "the best interest of the City" as 
the net benefits to the City and County Governance, the garage patrons, and the 
neighboring residents, businesses and institutions." 

As shown in the attachment Bid & Bid/RFP Performance Comparisons, the fiscal 
performance thus far of the two Bid/RPP management agreements has been positive 
despite the downturn of the economy and rising labor expenses. The quality of service 
and the physical condition of the facilities have also been exceptional. 

Similarly, one of two management agreements awarded via straight bid has also 
demonstrated positive net revenues whiie simultaneously increasing parking 
accommodations. 

The two Bid/RF Ps that were conducted by the not-for-profit parking corporations have 
experienced mixed fiscal results thus far. The downtown location of these two garages 
and their natural economic ties to the downtown economy likely plays a significant role 
in these revenue results. Both corporations, however, selected the highest-ranking firm 
with a strong management team and management approach that is conducive to a high 
level of customer service. 

Although the two management assignments were authorized solely due to withdraw! of 
the original parking firm, one garage has shown strong resilience to the economic 
downturn. 

In conclusion, the overall short-term benefits derived from the parking firms selected by 
the Bid/RFP process were realized either in terms of revenue growth, customer service 
enhancement, or both. Beyond solely empirical results, we feel confident that the parking 
firms selected through a Bid/RFP process are composed of strong management teams 



10 

41 



FROM' : PARKING AUTHORITY phone NO. : 354 3893 Attachment I 

?a?e 11 o:f"T5 



capable of maximizing revenues and providing the highest quality services to our 
residents, merchants and visitors. The Bid/RFP process has enabled the City to acquire 
such quality, qualified firms at minimal or no extra cost to the City. 



Prepared by: 

Ronald Szeto, Acting Director 
Scott Ruble, Property Manager 
Steven Lee, Administrative Analyst 
Rosie Scott, Office Manager 
Jerry Romani, Real Estate Division 



H:\PARKING\Budgct AnaIysftl25-02-PTC Urging '.he Bcird ufSupervuors to Amend Section 17.1] (a) rapcridoe 



11 42 



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43 



Attachment I 
Page 13 o± 15 



Bid & Bid/RFP 
Performance Comparisons 



Garage 


Gross 
Revenue 


Parking 
Tax 


Net 
Income 


Transient 
Vehicles 


Monthly 
Vehicles 


Golden Gateway - 4 months 

Five Star / Elite Parking 
March 2001 to June 2001 
March 2002 to June 2002 


2,027,794 

2,019,825 


370,523 
337,533 


1,180,267 
1,252,513 


93,320 
79,206 


2007 

3301 


Increase/Decrease 
Percentage Inc/Dec 

4 month ave. 3/01 to 6/01 
4 month ave. 3/02 to 6/02 


(7,969) 
-0.39% 

506,948.50 

504,956.25 


(32,990) 
-8.90% 

92,630.75 

84,383.25 


72,246 
6.12% 

295,066.75 
313,128.25 


(14,114) 
-15.12% 

23,330.00 
19,801.50 


1,294 
64.47% 

501.75 
825.25 


Increase/Decrease 


(1.992) 


(8,248) 


18,062 


(3.529) 


324 


Performing Arts - 12 months 
DAJA, Inc. 

April 2000 to March 2001 
April 2001 to March 2002 


1,463,120 
1,616,653 


286,194 
320,022 


826,918 
820.957 


135,085 
147,981 


3914 

3681 


Increase/Decrease 
Percentage Inc/Dec 

12 month ave. 4/00 to 3/01 
15 month ave. 4/01 to 6/02 


153,533 
10.49% 

121,927 
136,501 


33,828 
11.82% 

23,850 
27,022 


(5,961) 
-0.72% 

68,910 
70,842 


12,896 
9.55% 

11,257 
12.651 


(233) 
-5.95% 

326 
295 


Increase/Decrease 
Percentage Inc/Dec 


14,574 
11.95% 


3,172 
13.30% 


1,932 

2.80% 


1,394 
12.38% 


(31) 
-9.51% 


Fifth & Mission - 12 months 

Ampco System Parking 
June 2000 to May 2001 
June 2001 to Mav 2002 


15,440,521 
14,335,838 


2,874,124 
2,632,744 


5,908,921 
7,500,527 


1,941,509 

1,835,844 


8920 

8514 


Increase/Decrease 
Percentage Inc/Dec 

12 month ave. 6/00 to 5/01 
12 month ave. 6/01 to 5/02 


(1,104,683) 
-7.15% 

1,286,710 
1,194,653 


(241,380) 
-8.40% 

239,510 
219,395 


1,591,606 
26.94% 

492,410 
625,044 


(105,665) 
-5.44% 

161,792 
152,987 


(406) 
-4.55% 

743 
710 


Increase/Decrease 


(92,057) 


(20,115) 


132,634 


(8,805) 


(34) 



4 4 



Attacnment 1 
Page 15 of 15 





Gross 


Parking 


Net 


Transient 


Monthly 


Garage 


Revenue 


Tax 


Income 


Vehicles 


Vehicles 


Ellis 'Farrell - 2 months 












Parking Concepts, Inc. 












May 2001 to June 2001 


774,432 


135,586 


84,726 


134,201 


344 


May 2002 to June 2002 


757,969 


137,810 


109,571 


137,974 


372 


Increase/Decrease 


(16,463) 


2,224 


24,845 


3,773 


28 


Percentage Inc/Dec 


-2.13% 


1.64% 


29.32% 


2.81% 


8.14% 


2 month ave. 5/01 to 6/01 


387,216 


67,793 


42,363 


67,101 


172 


2 month ave. 5/02 to 6/02 


378.985 


68,905 


54.786 


68.987 


186 


Increase/Decrease 


(8,232) 


1,112 


12,423 


1.887 


14 


North Beach & Vallejo - 5 months 












NB 












February 2001 to June 2001 


N/A 


N/A 


N/A 


N/A 


N/A 


February 2002 to June 2002 


332,815 


66,634 


138,847 


60,627 


86 


Vallejo 












February 2001 to June 2001 


497,168 


98,934 


155,939 


81,475 


212 


February 2002 to June 2002 


345,213 


69,050 


122,129 


62,904 


88 


Total 












February 2001 to June 2001 


497,168 


98,934 


155,939 


81,475 


212 


February 2002 to June 2002 


678,028 


135,684 


260.976 


123.531 


174 


Increase/Decrease 


180,860 


36,750 


105,037 


42,056 


(38) 


Percentage Inc/Dec 


36.38% 


37.15% 


67.36% 


51.62% 


-17.92% 


5 month ave. 2/01 to 6/01 


99,434 


19,787 


31.188 


16,295 


42 


5 month ave. 2/02 to 6/02 


135.606 


27,137 


52.195 


24,706 


35 


Increase/Decrease 


36.172 


7.350 


21,007 


8,411 


(8) 


Polk Bush -10 months 












September 2000 to June 2001 


314,483 


62,443 


82,781 


48,179 


851 


September 2001 to June 2002 


318,466 


63,390 


77,757 


47.813 


838 


Increase/Decrease 


3,983 


947 


(5,024) 


(366) 


(13) 


Percentage Inc/Dec 


1.27% 


1.52% 


-6.07% 


-0.76% 


-1.53% 


10 month ave. 9/00 to 6/01 


31,448 


6,244 


8,278 


4,818 


85 


10 month ave. 9/01 to 6/02 


31,847 


6,339 


7,776 


4,781 


84 


Increase/Decrease 


398 


95 


(502) 


(37) 


(1) 


Moscone Center - 12 months 












July 2000 to June 2001 


2,537,357 


502,291 


1,442,221 


199,530 


3,792 


July 2001 to June 2002 


2,334,582 


463,749 


1,281,379 


182,756 


4.062 


Increase/Decrease 


(202,775) 


(38,542) 


(160,842) 


(16,774) 


270 


Percentage Inc/Dec 


-7.99% 


-7.67% 


-11.15% 


-8.41% 


7.12% 


12 month ave. 7/00 to 6/01 


211,446 


41,858 


120,185 


16,628 


316 


12 month ave. 7/01 to 6/02 


194.549 


38,646 


106.782 


15,230 


339 


Increase/Decrease 


(16.898) 


(3.212) 


(13,404) 


(1.39S) 


23 



C:\windows\TE\ff\[-ME0006D.xls]Perfonrance Comparisons 



45 



Attachment I 
Page 15 of 15 



Attachment I 

Bid/Request for Proposal (RFP) 

For Professional Garage Management Services 

Pros and Cons 

Pros 

1 . The Bid/RFP process provides the City with the best services at the most 
reasonable cost. 

2. The Bid/RFP process restricts aggressive bidding (low bids that possibly 
will require the operator to reduce services to maintain profitability over 
the term of the contract). 

3. The Bid/RFP process requires proposers to thoroughly evaluate the 
garage characteristics, needs and potentials before subrm'tting proposals. 
In the past, some bidders would submit a bid amount hoping their bid 
would be the lowest without understanding the requirements of the 
management agreement or the true operational needs of the subject 
garage and the surrounding community. 

4. When the Bid/RFP process is conducted with a budgetary Management 
Agreement, the management arrangement is the most beneficial to the 
City because "Low Ball" bids are eliminated while services to the City 
and communities are retained. 

Cons 

1 . The Bid/RFP process takes more time for staff to prepare documents and 
conduct evaluations. 

2. Staff undergoes more scmtiny and there is a higher potential for bid 
challenges. 

3. There is a potential for staff influences on the final outcome. 

4. When the budgetary management agreement is used, it takes additional 
staff time to monitor operating expenses as approved in the annual 
budget. 

5. The Bid/RFP process take longer to complete due to document 
preparation and evaluation processes. 

6. City does not always get the lowest bid. 



H:\PAFJCING\Commission\BRIEFTNGS\Attachment to 125-02 -PTC Bid-RFP Pros & Cons2.doc 



46 



FRANCISCO 




Attachment TT 
Page 1 of 14 



City an" County of San Fram a ^ 



PARTMENT OF PARKING & TRAFFIC 



LLIE LEWIS BROWN, JR., Mayor 

ED M. HAMDUN, EXECUTIVE DIRECTOR 

■NALD SZETO, DIRECTOR, PARKING AUTHORITY 




MEMORANDUM 



DATE : November 26, 2002 

TO: Mr. Ken Bruce, Analyst 

Office of the Budget Analyst 

FROM: Ronald Szeto, Director Vc 

Parking Authority 

SUBJECT: Bid/RFP Process 



The purpose of this memorandum is to provide additional analysis on the Bid/RFP 
process and to identify the advantages of the process. For three-plus years, the 
Department of Parking and Traffic (the "Department") has been working with the Office 
of the Budget Analyst in studying the utilization of the Bid/RFP process. As mentioned 
in previous communications on the subject, the Department, with the full support of the 
Municipal Transportation Agency, the Parking Authority Commission and the former 
Parking and Traffic Commission, has determined that the Bid/RFP process has been in 
the best interest of the City in the short term (three-plus years of utilization) and 
recommends continuing the utilization of the Bid/RFP process and continued study and 
analysis of this process for the long-term. 

It has been the experience of this Department that the "low bid" for a service is not 
always in the best interest of the City. In any economic model, one must always consider 
revenues as well as expenses. Under the competitive or straight bid process, only 
expenses are considered, representing just one-half of the economic model. Whereas, the 
Bid/RFP process has shown short-term success while considering not just projected 
expenses but revenue production as well. 

As stated in my July 9, 2002 letter to the Finance Committee, "While the short-term 
effects of the Bid/RFP have thus far demonstrated positive results, we are requesting 
extension of the authorization to use a Bid/RFP process until June 1, 2007 to evaluate the 
long-term effects". Due to the need for a long-term evaluation of the Bid/RFP proces it 
is not prudent to make a recommendation to have the Bid/RFP process a permanent 
process at this time. 



415)554-9805 FAX (415) 554-9834 



25 Van Ness Avenue, Suite 420 

47 



San Francisco, CA 94102-4576 



A\udcm uciii -u. 

Page 2 of 14 



Under the right conditions, the Department agrees with the Budget Analyst that a 
competitive bid is most often the superior process for contracting of goods and services 
by a municipality. Examples of such conditions are buying goods (e.g., light bulbs or 
brooms) or contracting for simple services (e.g., cashiering or steam cleaning). However, 
in the contracting of complex, high revenue, customer service intensive garage 
management agreements, the Department strongly recommends utilizing the Bid/RFP 
process. 

Contracting with a parking firm is like hiring employees. For simple tasks, almost any 
employee could perform the work to meet or exceed the minimum standards. However, 
for more difficult tasks, the job performance of the person with the right skills, tools and 
expertise will always be superior to the employee with fewer skills, improper tools and 
less experience. 

Analogous to the reasons mentioned-above, the Department recommends utilizing a 
competitive bid process for smaller and/or simple garage operations and a Bid/RFP 
process for larger and/or more complex garage operations. Please note that the smaller 
garages with simple operations are normally easily managed by parking firms with 
relatively modest operating experience. Since the benefit to the City is not critically 
dependent on the expertise of the management firm, the Department agrees with the 
Budget Analyst that a competitive bid process is the right process. 

However, some of our garages require a high level of expertise. These garages handle 
hundreds of cars per hour, conduct complex and highly coordinated valet parking 
activities, employ dozens of employees with constantly differing work and shift 
schedules, and the patrons of such garages (i.e. downtown and financial district) are 
accustomed to quick, efficient assistance and premium customer service. In such cases, 
the operator's management approach and the management team are acutely crucial to the 
overall success of the garage operation. This success translates directly to benefits to the 
City. The proper management team will consistently generate more revenue for the City 
by attracting and retaining more customers, pushing operations to accommodate more 
patrons and reduce expenses by obtaining multiple bids for simple goods and services 
and operating efficiently. 

We believe that the management fee paid by the City should be commensurate with the 
level of services provided to the garage's patrons (the public) and the City. We would 
like to point out that for the 2002-2003 fiscal year, management fees to be paid will total 
only $262,164 or 1.7% of the total operating budget of $15,460,016 for the eight garages 
with budgetary management agreements. Furthermore, proposals are shrewdly critiqued 
and evaluated for the many services and benefits that the parking operator will produce 
for the City. 



48 



Page. 



In our professional opinions, having worked as a valet attendant, a cashier, a supervisor, a 
manager and an administrator, the probability of success for a complex operation are 
substantially greater for a highly qualified management firm than for any given firm 
which happens to "get lucky" and submits the lowest responsive and responsible bid. 
With the Bid/RPP approach, the City, the garage operator, and the public have the 
greatest chance to acquire the maximum benefit from the garage facility because both 
halves of the economic model are duly considered, which is truly in the best interest of 
the City. 

Since the short-term results are positive and because both the Budget Analyst and the 
Department agree that defined performance measures are necessary to truly continue to 
gauge the benefits of the Bid/RFP process, the Department has compiled six performance 
measures to aid in this analysis. 

The Parking Authority staff, as a group, proposes to use the attached Performance 
Measure Rating Sheet (attachment A) to evaluate each garage operator on six essential 
areas of garage management as an on-going measure of their performance. Each Parking 
Authority staff interacts with each parking operator at difference levels on a regular basis 
and as a group can perform the evaluations very effectively. 

The following measures will be reviewed for each garage on a monthly basis by the 
entire Parking Authority staff. The staff has conducted one trial review of these measures 
and found the process to quite useful and very successful. The review of all of the 
garages took about two hours. As all four staff members participated in the review 
process, the total staff time needed for this monthly review is approximately eight hours. 
The current performance review measures are as follows: 

1 . Compliance (checklists) - The compliance checklists are a function of the 
management agreement that requires the operator to perform regularly scheduled 
maintenance and checks on items including safety, lighting, mechanical, structural 
and aesthetics of the facility. These measures will rate the operator not only on 
completing the requirements of their operating contract, but also on how well the 
operator proactively maintains the facility. Attached are checklists that are 
incorporated into the Management Agreements (attachment B). 

2. Responsiveness to the City - The Department frequently makes requests of the 
parking operators for implementation of City programs and special functions. In 
addition, the Department routinely requests information on operational, financial 
and community related issues. This entry will rate the operator on the 
effectiveness and timeliness of their compliance with City requests and evaluate 
their contributions to program implementations. 

For example, we would rate the effectiveness of the operator in hiring employees, 
the amount of time the operator takes to implement a valet program, the number 
of additional patrons as a result of the program, the cost of the program, the 
additional revenues generated by the program, and the amount of inconvenience 
cause by the program to the patrons that would have otherwise self-parked. 



49 



£S§chmentJJ 
p age 4 of 14 



3. Employees - Properly trained and effectively managed employees establish a 
good working environment and attribute directly to pleasurable parking 
experiences for the parking patrons. Outstanding employees are the single most 
important asset of successful garage operations. This entry will rate the operator 
on employee appearance, courteousness, effectiveness, skill and willingness to 
assist the public. 

4. Services - Parking operators and garage employees are always encouraged by the 
Department to make suggestions that would increase/enhance services to the 
patrons and communities. Services may include, but are not limited to, valet 
assistance, monthly billing, carpool parking, shuttle services, electric vehicle 
charging stations, signage, validation programs, vehicle location assistance, lock- 
out assistance, jump-starts, newspapers, directional maps, window washing and 
car detailing. This entry will rate the operator on its efforts in implementing new 
services and enhancing existing services. 

5. Marketing - Successful and effective marketing maximizes a garage's revenues 
as well as its usefulness and value to the surrounding communities. Researching 
and understanding the clientele and the parking needs of the community enables 
the operator to create innovative programs that will accommodate the 
community's parking needs in conjunction with increasing public recognition and 
enhancing customer appreciation of the garage. The operator will be rated on its 
efforts to understand the community's parking needs, to create and implement a 
marketing model, and the success of the overall marketing program in terms of 
increased business. 

6. Comment Cards - The Department will require that each garage have comment 
cards available to the parking patrons. The comment cards are returnable to the 
City and shall provide the parking patrons with an opportunity to remark on the 
garage operation and services. This entry will reflect the customers' comments 
and the operator's ability to improve on noted deficiencies as well as the 
frequency with which staff notices comment cards are not available and the ratio 
of both positive and negative comment cards per 1,000 customers. Attached is a 
sample comment card (attachment C). 

In order to make these performance measures more quantifiable and therefore all the 
more useful in determining the performance effects of the Bid/RFP process in the long 
term, the Department has developed even more stringent and specific sub-measures for 
these six aforementioned performance measures. 

These additional performance measures can be clearly documented and are quantifiable. 
However, the staff time required to compile these additional measures will be significant. 
Unfortunately, the compilation of these additional measures is impracticably at this time 
due to the enormous workload and limited staffing of the Parking Authority. 



50 



Page 5 of 14 



Couple of years ago, the Parking Authority, in anticipation of the recent economic 
downturn, intentionally decided not to fill a vacant Deputy Director position and in the 
mist of the City's current financial condition and budget constraints, the Parking 
Authority again elected not to fill the position nor requested for needed additional staff. 
However, when the additional staff person(s) become available, the Department will 
employ these additional quantified measures. After discussions with the Budget 
Analyst's Office, the Parking Authority staff has agreed to request for the position in the 
upcoming fiscal year. Additional measures are attached (attachment D). 

The Department feels that these six performance measures will assist the Department, the 
Office of the Budget Analyst and the Municipal Transportation Agency to further realize 
the empirical evidence that the Bid/RFP process, in selective utilization, is in the best 
interest of the City and that the Bid/RFP process allows the City to select an operator 
with the greatest possible chance to achieve the highest level of success. 



Prepared by: 

Ronald Szeto, Director, Parking Authority 
Steven Lee, Principal Analyst. Parking Authority 
Scott Ruble, Property Manager, Parking Authority 
Jerry Romani, Principal Real Property Officer, Real Estate 
Diana Hammons, Legislative Affairs, DPT 



H:\PARKJNGVBudget Analyst\Bid RFP renewal Nov 2002, ltr to Ken Brace.doc 



51 



Attachment A 

Performance Measures 

Garage 

Operator 



Attachment II 
Page 6 of 14 



Rating for 2003 


Jan 


Feb 


Mar 


Apr 


May 


June 


July 


Aug 


Sept 


Oct 


Nov 


Dec 


1. Compliance (check list) 


























2. Responsiveness to City 


























3. Employees 


























4. Services 


























5. Marketing 




'W///M 




^^ 


W///M 




6. Comment Cards 




W///M 




W////M 




W///M 




<%%*% 


WM 


Fvalnarinn grnnp initials , , ^ 









































































































Evaluation group rates each category on a scale from 1 to 10 (1= unsatisfactory, 5 = Average, 10 = excellent) 
(use black or blue ink pen) 

Comments: 



52 



Attachment TT 
Page 7 of 14 



Attachment B 



MAINTENANCE SCHEDULE 

(Garage Name) 



ITEM 


Daily 


Weekly 


Monthly 


Quarterly 


emi-Annual 


Annually 


Lights 


Inspect lights 


X 












Replace burnt-out bulbs 


X 












Inspect broken fixtures 


X 












Replace discolored covers 


X 














Cleaning 


Elevator areas 


X 












Stairwell areas 


X 












Bathroom & lobbies 


X 












Parking areas 


X 












Pick-up litter 


X 












Cashier booths/stations 




X 










Windows 






X 








Steam-clean stairwells 








X 






Ventilation Vents 










X 




Steam-clean Garage 










X 






Painting 


Paint over graffiti 


X 












Paint over foreign marks 






X 








Touch-up 












X 


Inspect striping 












X 




Elevators 


Inspect elevator operations 




X 










Professional Periodic Maintenance 






X 








Professional inspection 












X 




Landscaping 


Inspect Irrigation System 




X 










Remove Weeds 






X 








Prune trees and plants 












X 




Signs 


Inspect signs 




X 










Repair/replace damaged signs 




X 












Mechanical 


Doors open and lock properly 




X 










Inspect parking equipment 




X 










Inspect HVAC operations 






X 









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Attachment II 
Page 11 of 14 



57 



Attachment 17 
Page 12 of 14 



Attachment C 




Thank, you for parking with us! 

The Department of Parking and Traffic values your patronage 
and would appreciate your comments. 



Please take a moment to complete this card. 
Mail to: Department of Parking and Traffic. 
(No Postage Necessary) Questions? 554-9805 



Please rate the following from 1 to 10 
(1 = poor, 10 = excellent) 



Garage: Overall Lighting Cleanliness Signage 

Employees: Overall Appearance Helpfulness Courteousness 

Services: Overall Ease of Payment Valet Parking 

Would you park here again? (Y/N) 

Comments: 



nUKWK.ntovi 



BUSINESS REPLY MAIL 

FIRST-CLASS MAIL PERMIT NO. 00000 SAN FRANCISCO CA 



NO POSTAGE 

NECESSARY 

IF MAILED 

IN THE 

UNITED STATES 



POSTAGE WILL BE PAID BY ADDRESSEE 



DEPARTMENT OF PARKING AND TRAFFIC 
PARKING AUTHORITY 

25 VAN NESS AVENUE, SUITE 420 
SAN FRANCISCO, CA 94102 
c/o (garage name) 



58 



Attachment IT 
Page 13 of 14 



Attachment D 



PROPOSED ADDITIONAL QUANTIFIABLE PERFORMANCE MEASURES 

1) Compliance 

The performance measures will include: 

a) Copies of compliance checklist by the 5 l business day of subsequent month 

b) On-time submittals shall automatically receive a set rating 

c) Late submittals shall decrease rating 

d) Missing entries shall decrease rating 

e) Inaccurate entries shall significantly decrease rating 

f) Corrective action requested by the Department for items that are responsibility 
of the operator (i.e. graffiti removal, steam cleaning, light replacement) shall 
decrease rating 

g) Corrective action not performed within specified time shall decrease rating 

2) Responsiveness to the City 

The performance measures will include: 

a) The description of each request made of the operator 

b) The number of days the operator takes to provide or implement each request 

c) The number of telephone calls/clarifications until request is satisfied 

The Department will periodically request information, log requests and give an agreed 
upon deadline for completion. Operators shall increase or decrease their rating 
depending on the complexity for each successful or failed response on the following 
categories: 

a) Financial statements 

b) Revenues 

c) Utilization reports and graphs 

d) Response to customer complaints 

e) Requests for corrective action (i.e. graffiti removal, steam cleaning, 
light replacement) 

f) Multiple estimates for capital improvements, services and supplies 

g) Program participation and status reports (i.e. carpool patrons carpool 
validation programs, shuttle programs, validation programs) 



59 



Attachment IT 

,n n i Page 14 of 14 

3) Employees 

The performance measures will include: 

a) Percentage of employees that have attended a certified customer service 
training session 

b) Number of confirmed incidences of employee rudeness or misconduct 

c) Number of times the Department notifies the operator than an employee did not 
meet uniform standards 

d) Employee feedback from comment cards which rate employee's appearance, 
helpfulness and courteousness 

e) Number of vehicles per FTE per year for self-park and valet operations 

f) Employee satisfaction - The Department will solicit the garage employees' 
satisfaction level regarding their employers, the garage facility, the customers and 
the Department 

4) Services 

The performance measures will include: 

a) The number and types of services provided by the operator 

b) The feedback from comment cards rating the quality of services provided 

c) Number of damage claims 

d) Prompt response to customer complaints 

e) The average time taken to retrieve valet vehicles 

f) Sufficient supervision schedules at all times 

g) The average time to process transactions at pay at exit locations 

5) Marketing 

A successful marketing program will naturally generate more revenues when compared 
to an operation without a strong, targeted marketing effort. We will account for the status of the 
economy, the location of the garage, the potential customers using the garage, etc.) 

The performance measures will include a comparison of: 

a) The gross revenue 

b) The net revenue 

c) The number of transient vehicles 

d) The number of monthly parkers 

6) Comment Cards 

No additional measures associated with comment cards 



60 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Item 6 - File 02-1826 

Department: 

Item: 

Amount: 
Source of Funds: 
Description: 



Budget: 



Comments: 



Department of Elections 

Request for release of $1,322,849 of reserved funds 
for the December 10, 2002 run-off election. 

$1,322,849 

General Fund 

The Board of Supervisors reserved $1,322,849 in 
the Department of Elections FY 2002-2003 budget 
to cover the costs for a potential run-off election on 
December 10, 2002, pending the outcome of the 
November 5, 2002 election. The November 5, 2002 
ballot contained candidates for five different 
District Supervisor seats. Of the five Districts, 
three District Supervisors received more than 50 
percent of the votes and in two Districts, no 
candidate received over 50 percent of the vote, 
necessitating a run-off election in these two 
Supervisorial Districts (Districts 4 and 8) on 
December 10, 2002. 

Attachment I to this report, provided by the 
Department of Elections, identifies the estimated 
costs of $1,303,615 for the December 10, 2002 run- 
off election (See Comment No. 2). Attachment II, 
provided by the Department of Elections, provides 
explanations for each proposed expenditure. 

1. A preliminary review of the Department of 
Elections FY 2002-2003 spending patterns as of 
November 8, 2002 indicates that, similar to 
previous year's expenditure patterns, the 
Department is underspending in Permanent 
Salaries and significantly overspending in 
Temporary Salaries. According to Ms. Suzanne 
Berg of the Department of Elections, there are 
currently 11 FTE permanent positions filled, or 
44.4 percent out of a total 24.75 FTE permanent 
positions budgeted in the Department, with the 
balance of 13.75 FTE permanent positions being 
vacant, resulting in a 55.6 vacancy factor. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

61 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



The Budget Analyst notes that, based on a review 
of recent Department of Elections payroll reports, a 
portion of the FY 2002-2003 Permanent Salary 
expenditures result from salary payments to the 
former Director of Elections ($124,514 annual 
salary), who left the Department on April 23, 2002 
and who is still being paid and salary payments to 
the previous Deputy Director of Elections ($95,186 
annual salary), who left the Department on May 
13, 2002 and who is still being paid. The annual 
salary and related fringe benefit expenses for these 
two positions are currently being paid from the 
Department of Elections existing FY 2002-2003 
Permanent Salary and Fringe Benefit budget. Ms. 
Berg advises that the Deputy Director has been 
receiving full compensatory time off payments in 
cash since May 13, 2002. The former Director is 
being paid from the current FY 2002-2003 budget 
pursuant to a court order. 

2. As noted above, the Department of Elections 
proposed run-off budget of $1,303,615 is $19,234 
less than the $1,322,849 now being requested and 
previously placed on reserve by the Board of 
Supervisors. However, the Budget Analyst notes 
that the December 10, 2002 run-off budget of 
$1,322,849, which was included in the FY 2002- 
2003 budget for the Department of Elections, and 
then placed on reserve, assumed that all five of the 
Districts in which Supervisors were running would 
result in run-off elections. As noted above, the 
proposed December 10, 2002 run-off election will 
actually take place in only two of the five 
Supervisorial Districts, or three fewer Districts 
than the five Districts for which funding was placed 
on reserve. 

3. As detailed in Attachment II, the Department 
has budgeted each temporary position at $4,320, 
assuming an average rate of $18.50 per hour and 
approximately six weeks of work for each position, 
for an average of 233.5 hours per position at a total 
cost of $427,680, for 99 temporary workers for the 
six week period. The Budget Analyst questions the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

62 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



need for $427,680 of Temporary Salary funds for 
the proposed December 10, 2002 run-off election. 
For example, the Budget Analyst questions why the 
Department needs nine temporary employees, each 
working for six weeks, for an estimated cost of 
$38,880 to recruit an estimated 642 poll workers in 
two Supervisorial Districts containing 127 polling 
places, when the Department just recently 
conducted a City-wide election on November 5, 
2002, at which approximately 3,700 poll workers 
were recruited and hired for all 632 of the City's 
polling places, such that a portion of these same 
poll workers that were used for the November 5, 
2002 election should be readily available for the 
December 10, 2002 much simpler run-off election. 
In addition, the Budget Analyst questions why the 
Department is hiring all new City employees to fill 
temporary positions when Proposition E, approved 
by the San Francisco voters in November of 2001, 
and which was clarified in Proposition G, approved 
in the November of 2002 election, permits the 
Department of Elections to seek a waiver to permit 
existing City employees to work as Field Election 
Deputies (FEDs) or to perform other administrative 
tasks for the Department. Furthermore, many of 
the administrative tasks for which temporary 
employees are listed, such as Administrative 
Assistant, Budget and Personnel, Secretary and 
Information Officer are ongoing activities of the 
Department and are not necessarily directly related 
to the December run-off election. In fact, the 
Budget Analyst notes that the amount of funds 
placed on reserve for Temporary Salaries was 
$410,000, assuming run off elections were to be 
held in five Supervisorial Districts, and yet the 
Department is now requesting the release of 
$427,680, which is $17,680, or 4.3 percent more 
than the reserved amount for only two 
Supervisorial Districts. 

Based on several inquiries from the Budget 
Analyst's Office regarding the reasonableness of 
the requested Temporary Salary funds, the 
Department advises that they could reduce nine of 
the requested 99 Temporary positions from various 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

63 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



assignments, or an overall nine percent reduction, 
resulting in a decrease of approximately $38,880. 
At a minimum, the Temporary Salary request 
should therefore be reduced by $38,880 from 
$427,680 to $388,800. 

4. The proposed request includes $100,000 of 
expenditures for Overtime, which is based on 133 
Temporary staff working approximately a total of 
3,604 hours at an average hourly rate of $27.75. 
The Budget Analyst questions this level of required 
Overtime for two Supervisorial Districts, consisting 
of 127 polling places and notes that a total of 
$100,000 was placed on reserve, assuming a run-off 
election in five Supervisorial Districts, consisting of 
approximately 290 polling places, such that only 
43.8 percent of these polling places will actually be 
used for the December run off election. The 
Department does not yet know how much Overtime 
was expended for the November 5, 2002 election. 
Based on discussions with the Department, the 
Budget Analyst recommends a conservative ten 
percent reduction in Overtime of $10,000 from 
$100,000 to $90,000. 

5. The Mandatory Fringe Benefits should be 
reduced from $40,500 to $33,903, a savings of 
$6,597 based on the Temporary Salary ($38,880) 
and Overtime ($10,000) reductions reflected above. 

6. Overall, the Department of Elections reserve 
included $773,324 for non-personal expenses, 
including $190,909 for Other Fees, $34,670 for 
Professional Services, $21,066 for Equipment 
Rental, $135,269 for Other Expenses $238,670 for 
Materials and Supplies and $152,740 for the Work 
Order Services of Other Departments, assuming a 
run-off election in five Supervisorial Districts. The 
Department of Elections is now requesting a total 
of $735,435 for non-personal expenses, including 
$2,350 for Travel, Training and Membership Fees, 
$111,950 for Other Fees, $53,800 for Professional 
Expenses, $1,500 for Equipment Maintenance, 
$35,260 for Equipment Rent, $155,400 for Other 
Expenses, $184,175 for Materials and Supplies and 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

$191,000 for Work Orders for other City 
Departments. Although the requested release of 
reserve funds is $37,889 less than the amount 
placed on reserve, as noted above, the December 
10, 2002 run-off election is only to be conducted in 
two Supervisorial Districts, rather than the five 
Supervisorial Districts envisioned when the funds 
were placed on reserve, and yet the Department is 
requesting 95.1 percent of the amount placed on 
reserve. 

7. The $500 for Travel, $1,500 for Training and 
$350 for Membership Dues should be reduced, since 
none of these are expenses related to the December 
10, 2002 run-off election and the Department has 
existing funds budgeted in its FY 2002-2003 budget 
including $2,820 for Travel, $13,515 for Training 
and $2,000 for Membership Dues. 

8. As detailed in Attachment II, the Department is 
proposing to rent 91 vehicles, including two box 
trucks and 89 Minivans for an overall total of 461 
vehicle days at a cost of $18,940 for the December 
10, 2002 run-off election. Ms. Berg advises that 
various sized trucks are needed prior to and after 
the election to deliver and pick up the voting 
machines at each polling site, to shuttle supplies, 
signs, ballots, mail and equipment to various 
locations, for the Field Election Deputies (FEDs) on 
election day as well as the Deputy Sheriffs that 
would be deployed to pick up the voted ballots after 
the polls close. The Budget Analyst seriously 
questions the need for the numerous vehicles 
identified in Attachment II, and after consultation 
with the Department regarding the use of such 
vehicles recommends that the number of vehicles 
be reduced and the number of days that each 
vehicle is rented be reduced. Based on the 
configuration of vehicles agreed to by the 
Department, the Budget Analyst recommends that 
the vehicle rental expenses be reduced by $8,190 
from $18,000 to $9,810. 

9. The December 10, 2002 run off election will 
require one ballot card, containing one issue, in 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

65 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



each of the two Supervisorial Districts. As shown in 
Attachment II, the Department anticipates 
expending $71,775 to purchase 143,550 ballot 
cards, at a cost of $.50 per card. The Department 
advises that there are approximately 98,000 
registered voters in the two Supervisorial Districts. 
Mr. John Arntz, the Acting Director of the 
Department of Elections provided a memo dated 
November 26, 2002, which is included as 
Attachment III, which summarizes the challenges 
that occurred in the November 5, 2002 election 
which required the use of four ballot cards per 
voter. 

10. Based on a more detailed review of the Work 
Order requests from other City departments, and 
discussions with the Department of Elections, for 
the needs for the smaller December 10, 2002 run off 
election than previously anticipated, the Budget 
Analyst recommends (1) reducing the Department 
of Telecommunications and Information Services 
(DTIS) request by $10,000 from $40,000 to $30,000, 
(2) reducing the Department of Public Works 
(DPW) request by $5,000 from $15,000 to $10,000, 
and (3) reducing the Department of Parking and 
Traffic (DPT) request by $10,000 from $20,000 to 
$10,000. 

11. Included in the Department of Election's Work 
Order requests from other City departments is 
$85,000 for the Sheriffs Department. However, the 
Budget Analyst notes that as of the writing of this 
report, the Department of Elections had not 
received a plan from the Sheriffs Department 
regarding the proposed deployment and Sheriffs 
Department expenses for the December 10, 2002 
run off election. However, based on inquiries by the 
Budget Analyst's Office, the Sheriffs Department 
provided a projection of their election costs for the 
December 10, 2002 run off election to the Budget 
Analyst's Office, which is included as Attachment 
III. This projection, which includes Sheriffs 
staffing at the (1) Sheriffs Command Post, (2) 
Elections Operations Center, (3) Pier 30/32, (4) 
Mobile Support Units, (5) Memory Pack Collection, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



(6) Uplink Site Security, (7) Precinct Security and 
Ballot Collection, (8) Pier 29, (9) City Hall, (10) 
Training, (11) Absentee Ballots from Main Post 
Office and (12) Dismantling Eagle Boxes reflects 
an estimated cost of $49,426 of additional Sberiff s 
Overtime expenses which would be billed to the 
Department of Elections for the December 10, 2002 
election. However, such estimated costs assume 
that 52 Sheriffs Deputies would be deployed to pick 
up the voted ballots at the 127 polling sites, or 
requiring only 2.44 polling places per Deputy. 
Based on discussions with the Department of 
Elections, approximately 26 Sheriffs Deputies, or 
one-half the staffing proposed should be sufficient, 
thus requiring each Deputy to retrieve the ballots 
from an average of only 4.88 polling places (127 
polling places divided by 26 Deputies). The Budget 
Analyst notes that this is in addition to the up to 40 
Parking Control Officers (PCOs) and six Deputy 
Sheriffs that would be deployed to collect the data 
memory packs from each polling site, in order to 
quickly count the votes. 

At the November 5, 2002 election, Proposition G 
was approved by the San Francisco voters, which 
stated that the Sheriff shall be responsible for 
transporting all voted ballots and all other 
documents or devices used to record votes from the 
polls to the central counting location (instead of 
preserving the security and integrity of elections in 
all matters) and approving a security plan (instead 
of providing security) for the ballots until the 
certification of election results. As of the writing of 
this report, a security plan has not yet been 
submitted by the Sheriff to the Department of 
Elections. In the professional judgement of the 
Budget Analyst, based on the approval of 
Proposition G, the responsibilities of the Sheriffs 
Department should be more limited than reflected 
in the Sheriffs proposed plan that was obtained by 
the Budget Analyst's Office. As noted above, as of 
the writing of this report, the Department of 
Elections has not yet received a plan of the 
deployment or expenses proposed by the Sheriffs 
Department for the December 10, 2002 run off 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

67 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



election. Therefore, the Budget Analyst 
recommends that the Work Order funds from the 
Department of Elections to the Sheriffs 
Department be reduced from the $85,000 now being 
requested to $40,000, a reduction of $45,000 to 
cover the currently anticipated expenses for the 
December 10, 2002 election. The Budget Analyst 
also recommends that the Sheriffs Department 
work more closely with the Department of 
Elections, the Mayor's Office and the City 
Attorney's Office to identify the legally required 
and currently necessary security for future 
elections. 



is 
as 



13. In summary, the Budget Analyst 
recommending reductions totaling $135,252, 
follows: 

Amount Budget 

Recommended Analyst 

Amount by Recommended 

Requested Budget Analyst Savings 

Temporary Salaries $427,680 $388,800 $38,880 

Overtime 100,000 90,000 10,000 

Fringe Benefits 40,500 33,903 6,597 

Travel 500 500 

Training 1,500 1,500 

Membership Fees 350 350 

Other Fees 111,950 111,950 

Professional Services 53,800 53,800 

Equipment Maintenance 1,500 1,500 

Equipment Rent 35,260 27,070 8,190 

Other Expenses 155,400 155,400 

Materials & Supplies 184,175 184,175 

Work Orders 191,000 121,000 70,000 

Total $1,303,615 $1,167,598 $136,017 



In addition, as noted above, the original amount of 
funds placed on reserve was $1,322,849 for the 
potential run off election, which is $19,234 more 
than the $1,303,615 now being requested to be 
released from reserve. 



Recommendations: 



1. In accordance with Comment No. 13 above, 
reduce the reserved amount of $1,322,849 by 
$155,251 ($136,017 plus $19,234) to $1,167,598 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

68 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



and release the $1,167,598. This will leave 
$155,251 remaining on reserve, which should be 
returned to the City's General Fund Reserve. 

2. Request that the Sheriffs Department work 
more closely with the Department of Elections, the 
Mayor's Office and the City Attorney's Office to 
identify the legally required and currently 
necessary security for future elections. 



BOARD OF SUPERVISORS 
BUDGET^NALYST 



Hiiacnmem x 
Page 1 of 2 

Elections 2002 Run-Off Expenditure Budget 

There will be a Municipal Run-Off Election held in Supervisorial District 4 and Supervisorial District 8 
on Tuesday, December 10, 2002. These two Districts comprise 148 precincts. Of these, one is a mail ballot 
precinct and 20 are consolidations. There will be 127 polling places as well as an early voting counter 
in City Hall. Each District requires a unique ballot. Approximately 650 Inspectors/clerks will be required 
to staff the polls and be on stand-by. 

1GAGFAAP- Run-off 



Object [ 



Detaii \ Budget 



005 Temp Salaries 
011 Overtime 
013 MFBs 

021 Travel - New Law 

022 Training - CACEO and New Law 
024 Membership Dues 

026 Other Fees 

Poll worker fees and training 
Polling place rents - 107 x 100. 
Rec and Park 
School Board 
Library& Churches 



95,250 

12,700 

1,000 

2,000 

1,000 



427,680 

100,000 

40,500 

500 

1,500 

350 

111,950 



027 Professional Services 

Registration Maps 

Software maintenance agreement, DIMS 

Temp agency 

Translations and layout 

Delivery services, poll worker trainers, etc. 

Mail House - Ink jetting/carrier sort VIPS 

Rosters- precinct unique, 107 triple sets 

Ink-Jetting AV Envelopes - 19,000 

029 Equipment Maintenance 

Elevator -240 Van Ness 
Miscellaneous small equipment repair 

031 Equipment Rent 

Vehicles 

Copiers - 2 

Copier- aditiona! meter clicks 

Election day tents, lighting, etc. 

Portable toilets 50x60. 

Audio Visual/ Media Center 

Warehouse Dollies 

Fencing 

Computer Rentals - 30 

Forklift - Warehouse/Brooks 



53,800 



1,500 


16,000 


4,000 


3,000 


2,500 


15,000 


9,800 


2,000 


1,000 


500 


18,000 


1,500 


1,000 


3,375 


2,750 


1,235 


200 


1,200 


4,500 


1,500 



1,500 



35,260 



035 



Other Expenses 

Poll worker manual - 1,500 copies 



1.500 



155,400 



70 



040 



081 







Attachment I 






Page 2of 2 


Freight/delivery/overnight/overseas ballots 


4,000 




AV Ballot postage - 19,000 x 1.10 


20,900 




AV Ballot return postage 1 9,000 x 1 .00 


19,000 




VIP postage- 100,000x75 


75,000 




Other postage - bus reply, registrations, poll 


20,000 




Legal Advertising - Poll Workers, Poll Locations 


15,000 




Materials and Supplies 




184,175 


Electrical 


2,500 




Hardware 


2,500 




Lumber 


1,000 




Food 


1,000 




Data processing supplies 


5,000 




Minor data processing equipment 


3,000 




Minor furnishings 


1,000 




Other office supplies 


5,000 




Ballots - 143,550 cards @ .50 


71,775 




VIP layout and printing - 150,000 @ .50 


75,000 




AV Envelopes - 20,000 mailers @ 110/M 


2,200 




AV Envelopes - 20,000 return envelopes @ 85/M 


1,700 




AV inserts -20,000 


1,000 




Ballot pens 


1,500 




Other Office/Precinct/Canvass Supplies 


10,000 




Work Orders 




191,000 


Building Services 


20,000 




DTIS (12/01 was $44,000.) 


40,000 




DPW 


15,000 




DPT 


20,000 




Port 


1,000 




Sheriffs Department 


85,000 




Repro 


10.000 





Total 



1,303,615 



71 



Page 1 of 



Elections 2002 Run-Off Expenditure Budget 



005 Temp Salaries ($427.680) 

The average Department of Elections temp salary is $18 .50/hr. The run-off election 
cycle is a minimum of six weeks and includes pre-election preparation, the canvass, and 
post-election tasks leading to certification. Each temp salary for a run-off election can 
therefore be budgeted at $4,320. By law we are required to have Chinese and Spanish 
language assistance in many of the temp staff assignments listed below. 



Temps 


Assignment Task 


Budget 


6 


Poll Locating 
Precinct Deliveries 


Visit potential poll sites. Analyze for ADA compliancy, 
meet with owners, sign documents. Canvass 
neighborhoods for relocation sites. Deliver and pick- 
up election day equipment - booths/tables chairs, 
eagles. Enter site location and details into DIMS. OT 
- involves eveninq and weekend work 


25,920 


9 


Poll Worker 
Recruitment 


Field and phone work. Recruit and interview potential 
inspectors, clerks, student workers, translators and 
standby workers. Assign to precincts and training 
classes. Multiple mailings, database updates, verify 
voter registration of workers, dispatch, standby 
workers, verify oath sheets, enter into payroll system, 
and distribute checks. 


38,880 


7 


Warehouse and 
Processing Center 


Sort, empty, and clean red boxes. Clean, check and 
repair voting booths, tables, and chairs. Prepare and 
pack precinct specific materials for distribution to 
poils and for standby. Pack supply trucks and FED 
vehicles with precinct specific supplies. Separate and 
process all materials, supplies and equipment post 
election. Shrink-wrap, palletize. 


30,240 


4 


Campaign Services 


Front line of service to the public including; voters, 
campaigns, observers, press, applicants. Candidate 
filinq. Fill Sunshine ordinance requests. 


17,280 


5 


Phone Bank 


Answer incoming calls in English (2), Chinese (1), 
Spanish (1) and Russian (1), and handle public 
requests for voter/election information. 


21 ,600 


5 


Filing. Copying, 
Runners, Observer 
Guides 


Sort and File incoming FPPCs (Fair Political Practice 
Commission) for the state. The DOE is a State 
depository. Various office duties as assigned, 
copying, errands, observer guides, badge makinq. 


21,600 


6 


Logic & Accuracy 


Script writing, L&A testing of eagle vote tabulators. 
Memory pack preparation. Set eagles to election 
specifics. Meet with members of L&A Board to certify 
testinq results. 


25,920 


10 


Data Entry 


Data entry, registration, signature check of absentees 
and provisionals, merge and purge, voter roll 
maintenance. Voter mailinqs. 


43,200 


10 


Assembly 


Preparation of precinct specific supplies, ballot 
inventory, absentee ballot preparation, ballot 
distribution, AV process, receipt and process of AVs 
and provisionals, wanding rosters, preparation of 
election documents for palletization post election. 


43,200 



72 







Parjp '? nf H 




Temps 


Assignment 


Task : 


Budget 


3 


MIS 


DIMS, database- networking, DIMS queries, reports, 
command center, results, all MIS needs. 


12,960 


4 


Logistics/Uplink 
Sites 


Plan DPT, Fed and Deputy Sheriff routes. Parking 
logistics, vehicle dispatching, uplink site logistics, and 
uplink staffinq. Election reports. 


17,280 


4 


Outreach 


Community liaisons, information officers, educators. 
Service community in Chinese, Spanish, and 
Russian. Work with new voters, recruit community 
translators, Presentations/booths at community fairs, 
churches, schools, senior centers, group meetings 
and clubs. 


17,280 


1 


Payroll 


All payroll transactions thru People Soft and TESS - 
PDF reports. 


4,320 


1 


Admin Asst. 


Phones, vehicles, supply ordering, intra-departmental 
requisitions 


4,320 


2 


_ . & I Interview, hire, process paperwork through DHR. 
p u ge , Separation reports, Budget Preparation, ADPICS, 
so I FAMIS. Purchasing, invoice payments. 


8,640 


1 


Drivers t 15 2-day hires, = 30 days total or one 6-week period 


4,320 


1 


Secretary ! Secretarial support to Administration 


4,320 


1 


Admin Clerk | Class monitor, office support 


4,320 


1 


Information Officer 


Assistant to Director, media liaison 


4,320 


2 


Mail Room 


USPS Liaison, pick-up mail from Evans Street Postal 
Facility, sort, separate, deliver. Handle incominq AVs 


8,640 


1 


Supply room 


Stock, inventory, shuttle between City Hall, Brooks 
Hall. 240 Van Ness, Corovan warehouse and Pier 29 


4,320 


8 


Canvassers 


1 6 canvassers for a three-week period. Equivalent to 
8 6-week positions. Election 28-day canvass. 


34,560 


2 


Voter Information 

Pamphlet, 

Publications 


Ballot layout, compile VIP content, proof ballots and 
VIP, in-house publications and outreach materials, 
work with printers, mail house and post office reps. 


8,640 


4 


Early Voting 
Counter 


Three weeks, seven days a week at early voting 
counter (English, Chinese, Russian, Spanish 
speaking) 


17,280 


1 i FEDS I 16 FEDsx 16 hours = 256 hours = 1 6-week position 


4.320 



Oil Overtime ($100.000) 

Poll locators, recruiters, trainers, delivery teams, MIS staff, mail crew, outreach staff, data 
entry clerks, phone bank personnel, early voting counter staff. AV and precinct ballot 
assembly teams, warehouse workers, L&A testing teams, Administration, and FEDS all work 
overtime. The timeframe between a November election and December run-off is so short 
almost everyone is required to work most weekend and holidays. The voting public expects it, 
the nature of calendar driven elections demands it and in many cases the California Elections 
Code mandates schedules. Deadlines for completion are unforgiving. It is not unreasonable to 
budget 5100,000 in overtime for the 3 weeks leading up to Election Day, Election Day and 
the three weeks following to certify a run-off election 

013 Mandatory Fringe Benefits ($40,500) 

As determined by payroll 

021 Travel - CACEO - New Law Conference. Sacramento ($500) 

Secretary of State, review, presentation of California Elections Code and revised or new 
election codes. - Three days 6 staff 



73 



"Page 3 of S 
022 Training - CACEO - New Law ($1500) 

024 Membership Dues ($350) 

California Association of Clerks and Elections Officials - for attendees to New Law 
Conference. 

026 Other Fees ($111.950) 

Poll Worker Fees and Training ($95,250) 

One inspector and 4 clerks will be recruited, and trained for the 127 polling places on 
Tuesday, December 10, for a total of 635 election officers. This includes standby workers. 
Including $25 for training class, $25 for pick up of Inspector supplies and ballots, the average 
stipend per poll worker will be $150. 

Polling Place Rents ($12, 700) 

127 polling sites, housing 147 precincts. Polling place payments are $100 per location 

Rec and Park ($1,000) 

Early opening, closing and janitorial services for polls located in Rec and Park 
facilities. Overtime rates. 

San Francisco Unified School Board ($2,000) 

Early opening, closing and janitorial services for polls located in schools. Overtime Rates. 

Library ($1,000) 

Early opening, closing and janitorial services for polls located public library facilities. 
Overtime rates 

027 Professional Services ($53.800) 

Registration Maps: ($1,500) 

1 ,000 1 9" x 24" color precinct maps of the City and County of San Francisco, for distribution 
to FEDs, Sheriffs, Polling places, campaigns, and front counter in Department of Elections. 

Data Information Management System: ($1 6, 000) 

Services to set the election in the system, and maintain software through election certification. 
Maintenance and back-up support for voter files. 

Temp Agency: ($4,000) 

One shift of support labor to assist at processing center, Pier 29 on election night 

Translations and Layout: ($3,000) 

Voter Information pamphlet - two versions, Run-off pamphlets for Outreach Staff. 

Delivery Services, Poll worker trainers: ($2,500) 

Instructors conduct two hour Inspector and poll worker training classes. They are paid $75 
for each class taught. There will be 25+ classes to accommodate the 700 workers recruited for 
the run-off election. 



74 



Page 4 of 8 

Mail House: ($15, 000) 

Mailing services for 120,000+ voter information pamphlets. Download files via FTP and 
convert records to system, perform file pass, select and sort to create 2 separate mailing files. 
Standardize address to meet USPS regulations with zip code correction. Sort files to best 
level of USPS first class presort and output sortation reports. Band, tray and prepare USPS 
documents. Deliver to USPS. 

Rosters: ($9,800) 

Three unique sets of precinct specific rosters for 147 precincts. Sections include roster of 
active voters, list of inactive voters, roster correction form, challenge list, assisted voters list, 
Rosters printed from Crystal Reports software. 

Ink Jetting A VS: ($2, 000) 

Inserting the return AV envelope into the outgoing mailer, and ink jetting voter name, 
address, precinct information and corresponding bar codes onto the approximately 19,000 AV 
envelopes prior to insertion of ballots. 

029 Equipment Maintenance ($1.500) 

Otis elevator contract for 240 Van Ness: ($1,000) 

Fax repair, decollatofburster repair, time stamp repair: ($500) 



031 



Equipment Rent ($35.260) 



Vehicles: Thrifty Rentals ($18,000) 



Pick-Up 


Return 


Length 
of Rental 


# 
Vehicles 


Vehicle 


Rate 


Total 
Days 


Est Total 


8-Dec 


13-Dec 


5 


2 


15' box 


S90/495 


10 


$900 


2-Dec 


17-Dec 


15 


16 


Mini Van 


$40/280 


240 


$9,600 


9-Dec 


11-Dec 


2 


8 


Mini Van 


$40/280 


16 


$640.00 


8-Dec 


11 -Dec 


3 


65 


Mini Van 


$40/280 


195 


$7,800 



The box trucks are used as supply trucks for polling sites as well as to shuttle supplies as 
needed from the processing center/warehouse areas to City Hall. The mini vans are staged in 
increments, the first group being used for polling place locating, signage postings, absentee 
ballot pick up from the post office, mail drops, shuttling equipment to and from training 
classes, outreach programs, delivery of inspector supplies, polling place set up election day 
field support vans, and polling place breakdown. The remainder of the vans are used on 
Election Day to shuttle inspectors and clerks, for the standby drivers, election center drivers, 
FEDs and sheriff deputies 

Copiers: Xerox ($1,500) 

Copiers are required in satellite areas before, during and following the election. The 
department has two old copiers, whose lease runs out mid December. We short term rent two 
additional high volume units, which are shuttled where needed. Included in their use is: result 
printing on Election Night, the canvass at Brooks Hall, the facility at 240 Van Ness where the 
assembly team works, and the election command center/standby worker areas. 

Copiers: Minolta ($1,000) 

Each election requires vast copying that far exceeds the contracted number of copies on our 
rental equipment. In addition to our monthly rental we are billed for the extra meter "clicks." 

Tents/ Lighting: Abbey Rents/U-Save Equipment Rental ($3,375) 



75 



Page b of 8 
The staging area for FEDs, Sheriffs Deputies and vehicles is at Pier 30/32. Vehicles are 
delivered to the Pier the day before an election and retrieved the day following the election. 
The election night processing center is at Pier 29. Both the FEDs and Sheriffs Deputies 
return election materials to the processing center. Tower lights/generators are rented to 
illuminate the pier areas, for security and function. Both areas are up and running by 4:30 am 
on Election morning and activity continues through the next morning. The election 
warehouse at Pier 29 is open to the elements and tents are required for shelter. The tent area 
is used as a sign in area for workers as well as a break area. The 20' x 20' tents are erected 
the December 9 and dismantled the day following the election. By city contract the tower 
lights are $175/daily. Two units go to Pier 29 and 4 units to Pier 30/32. The four units are a 
two-day rental. Tower Light rental costs are $1750. Two 20' x 20' tent rentals, including 
delivery, set-up/strike, lights, permits, and fire extinguishers is $1625. 

Portable Toilets: Golden State Portables ($2,750) 

The owners of many polling locations decline to have inspectors and clerks use their restroom 
facilities, therefore the department must provide portable toilets at those sites. Port-a-potties 
are put in place by 5:00 am on election morning and picked up following poll closure. As 
well portable toilets are delivered to the staging areas, and the elections processing center 
warehouse. We also have several units on stand-by for Election Day. As of 11/14/02 we 
have identified placement for 40 units. The portable toilet units are $55 per rental unit. 

Audio- Visual/ Media Center: McCune Audio Visual ($1,235) 

The North Light Court at City Hall is the media center for Election Day and evening. City 
Hall Media Services do not have the equipment necessary for the press center and results 
displays. McCune Audio delivers the needed equipment and provides two techs to set up, 
monitor and strike. Equipment includes screen frame, rear fabric, black dress kit, Sanyo 2100 
lumens projector, and media cart. 

Warehouse Dollies: Dolly Rentals ($200) 

Heavy Duty handcarts are rented for use at the processing center to unload the vehicles. 
Dolly rentals provides these for $5 each for a 24-hour period. We anticipate using 10 
handcarts for two days during the run-off election to unload incoming vehicles and move 
equipment to warehouse processing/storage areas. 

Fencing: Anchor Fence ($1,200) 

Ballots are canvassed and processed at Brooks Hall, the basement of Bill Graham Civic 
Auditorium. As the Public Library and Event Facilities use Brooks Hall for storage, the ballot 
area must be secured. Fence panels are rented to enclose and secure the ballot processing 
area. 

Computer Rentals: Desktop ($4,500) 

Thirty additional computers are required for the overflow of election work; processing 
inspectors and clerks, as well as Absentee and Provisional ballots. The computers are also 
used at workstations for seasonal staff and election specific projects. The rentals include 
monitors, keyboards, mice and sufficient RAM to handle the department's DIMS (Data 
Information Management Systems) and Lotus Notes requirements. 

Forklifts: V-Save Equipment Rental ($1,500) 

Ballots are delivered on pallets. Forklifts are necessary to unload the delivery trucks as well as 
move the pallets into place for sorting. The crew at the warehouse/processing center requires 
a forklift to shift heavy equipment and pallets of supplies, and Brooks Hall requires a forklift 
to move the pallets of elections materials through the canvass time and to load the materials 
on trucks to be taken to the secure document storage facility in Alameda. Each unit is 
$750/mo. 



76 



Page 6 of 8 
035 Other Expenses ($155,400) 

Poll Worker Manual: ($1,500) 

Each inspector and clerk is provided with a copy of the Poll Worker Manual. Copies are used 
training sessions, added to the inspector bag, carried with the FED supplies and on hand for 
standby workers. About 700 inspector and clerks will be trained for the run-off election. Each 
will be given a copy in class. The remainder of the run will be used as outlined. 

Freight/Delivery/overnight express: ($4,000) 

Time driven delivery of absentee ballots, especially to out of state, overseas, or replacement 
requires the use of overnight or express overseas mail services. 

AV Ballot Postage: ($20,900) 

There are approximately 18,553 AV voters in District 4 and District 6. The AV postage is 
$1.10 per unit. We are planning for 19,000 mailed AVs. 

AV Return Postage: ($19,000) 

The AV return postage account must be infused with enough funds to cover all possible 
returns. At $1.00 each the fund needs $19,000 to allow for all AVs to be returned. 

VIP Postage: ($75,000) 

The Voter Information Pamphlet (VIP for the Municipal Run-Off Election is a trilingual 
presentation. Rather than mail 2 different versions in 3 languages we have determined it will 
be cost effective to mail 2 versions (District 4 and District 8) with Chinese and Spanish 
translations on the same piece. The MPs will be mailed first class in order to meet the time 
constraints of a December 10, 2002 election. Approximately 100,000 pieces will me mailed 
at an estimated cost of .75 each. 

Other Postage: ($20,000) 

Multiple mailings are generated throughout the election cycle. Included in the Run-off cycle 
are recruitment letters, confirmation letters and thank-you to inspectors and clerks, 
confirmation letters to polling place owners, high school outreach mailings, voter 
registrations, business reply envelopes changes of polling place notifications, polling place 
advisements. 

Legal Advertising: ($15,000) 

Public Notice of polling places locations, poll workers, inspectors at each location. Election 
announcement and notices of candidates. 



040 MATERIALS AND SUPPLIES ($184.175) 

Electrical: ($2,500) 

Each polling place must be supplied with extension cords, power strips, adaptors, and extra 
light bulbs. Voting booths require special lamp fixtures. These are tested and replaced prior 
to delivery of the booths. 



Hardware: ($2,500) 

Miscellaneous hardware items are purchased through Cole-Fox. Everything from gaffer's 
tape, and masking tape for the polls to disposable rain ponchos, box cutter, rags, cleaning 
supplies for the voting booths and supply bins. 



77 



Attachment II 
Page 7 of 8 
Lumber: ($1,000) 

Masonite and plywood are on hand to even and repair garage floors, uneven entries and minor 
repairs. 

Food: ($1,000) 

Election day runs into an 1 8 - 24 hour workday for many. FED vehicles are supplied with an 
apple, water and granola bar for the 4:30 am start, the warehouse workers are provided with 
drinks and sandwiches. Coffee is kept on hand at the command center. 

Data Processing Supplies: ($5,000) 

Labels, label printer cartridges, equipment for the early voter counter. Header cards for 
precinct ballot sorts through the IV-C machines. Printer ribbons/cartridges for the eagle vote 
tabulators. Eagle tapes. 

Minor Data Processing Equipment: ($3,000) 

Tricoder Wanda unit, replacement cables, label writers. 

Minor Furnishings ($1,000) 

Other Office Supplies ($5,000) 

Copy paper, toner cartridges, storage boxes, CDs for voter files, miscellaneous office 
supplies, and precinct supplies including; pens, glue, tape, note pads, rubber fingers, 
latex gloves, labels, wipes, magnifying glass, highlighters. 

Ballots: ($71,775) 

A total of 143,550 ballot cards, printed in two versions @ .50 each 

Voter Information Pamphlet - VIP ($75,000) 

Two versions of a trilingual pamphlet. A total of 150,000 copies @ .50 each 

AV Envelopes ($2,200) 

20,000 oversize, two color AV mailing envelopes @ $1 10./M 

AV Return Envelopes ($1,700) 

20,000 oversize, two color AV return envelope @ $85/M 

AV Inserts ($1,000) 

20,000 trilingual instructions inserts 

Ballot Pens ($1,500) 

Optech scannable ballot marking pens @ .50 each 

Precinct/Assembly/Canvass Supplies ($10,000) 

Demonstration ballots, security seals, tamper proof ballot bags, badges, patriot signs, no 
electioneering signage, anti-static memory pack bags, key cords, ADA signage, pen grips, 
ADA grips, no smoking signage, calculators, ballot seals, plastic sheeting. Etc 



081 work Orders ($191,000) 

Building Services ($20,000) 

240 Van Ness - A weekly charge of $628.00 for a total of 6 weeks from (11/15/ -12/3 1/02 ) • 
Mon - Fri - 4 hours a day = 20 hrs/per week = $3768. Should an initial clean-up of 240 Van 

78 



Attachment II 
Page 8 of a 
Ness be necessary ( as was the case before ) the additional one time cost to do this would be 
$628.00 regarding this item. 

City Hall - A weekly charge of $753.00 for a total of 6 weeks from ( 11/15/02 - 12/31/02 ) - 
Mondays - 4 hrs. in the morning & Mon - Fri - 4 hrs each night = 24 his/per week = $4518. 
There is also a charge to refurbish the hallways in the lower level of City Hall damaged or 
marred by the influx of AV voters and election activity. This includes patching, painting and 
floor repair. To date the fee has been approximately $20,000 per election. As the majority of 
the election process has been moved to 240 Van Ness and Brooks Hall we anticipate a lower 
charge. 

DTIS ($40,000) 

The Department of Elections December 2001 DTIS bill was $44,000. We have fewer active 
lines this year; therefore we have estimated a reduced budget. 

DPW ($15,000) 

Due to the overlap of a run off following 5 weeks after a General Election the department has 
separated much of the run-off activity to 240 Van Ness. Security wire has been placed over 
the windows and doors of that building for a cost of approximately S5000. DPW also assists 
in the election process by responding to electioneering signage complaints coming into the 
election center, and dispatching vehicles and crews to remove signage 

DPT ($20,000) 

The estimated charges for DPT, including Overtime is $20,000. This is in keeping with 
comparable elections. We also have charges associated with permits for street closures on 
Election day. 

Port ($1,000) 

Lease of pier space to receive delivery of vehicles from Thrifty as well as to groups for pick 
up following the election. Approximately S3300 in pier rental space was incurred for the 
November 5, 2002 election. We are projecting using 2/3 less space for the run-off election. 

Sheriffs ($85,000) 

Projection based on preliminary discussion with Chief Vicki Hennessey 11/14/02 

Reprographics ($10,000) 

Production of miscellaneous election materials such as ballot custody forms, ballot box seals, 
memory pack bag seals, parking permits, problem report forms, change of polling place and 
change of polling place notifications, observer guides, outreach brochures and street indexes. 



79 



Attachment III 
Page 1 of Z 

DEPARTMENT OF ELECTIONS 0^^^^ JOHN ARNTZ 

City and County of San Francisco fcf Jjk^jj^ )* ] Acting Director 




To: Harvey Rose, Budget Analyst 

From: John Arntz, Acting Director, Department of Elections 

Re: Ballot Delivery 

Date: November 26, 2002 



At the request of Debra Newman, I am providing a brief summary of the extraordinary 
logistical challenges presented by the oversized, four-card ballot used in the November 
election. 

November 2002 

The size and weight of the cards drives the logistical planning of all elections. The 
November 5, 2002 election ballot was an unprecedented four-card ballot that measured 
9.5 inches by 20 inches. In order to have an adequate supply of ballots to open the polls, 
each inspector started the day with 300 ballots - or 1200 individual cards. Each box of 
300 cards weighed 22 pounds. Four boxes, one with each of the four ballot cards, 
weighed 88 pounds. We determined that 88 pounds of cards was the maximum 
reasonable weight we could ask inspectors to transport to the precincts, in addition to 
carrying other precinct supplies. 

Department personnel assembled the 88-pound ballot bags for each of the inspectors. We 
held inspector-training classes in an offsite location, requiring us to transport hundreds of 
88-pound bags to these classes for the inspectors to take home. On the morning of the 
election, the inspectors, regardless of physical ability or mode of transportation, hauled 
their load of ballots to their assigned polling place. 

In keeping with California Elections Code section 14102 the department ordered in 
excess of the number of ballots required by law, and planned and scheduled deliveries of 
those ballots to the polling places throughout the day. The Department monitored ballot 
supply and delivered additional ballots as needed throughout election day. For precincts 
with large numbers of registered voters, the Department instructed the Field Election 
Deputy (FED) to automatically deliver additional ballots before noon to these precincts. 
In addition, the Department monitored voter turnout by tracking the number of ballot 
cards placed through each precincts' optical scanning machines ("eagles"). Based on this 
information the Department instructed FEDs to deliver additional ballots to nearly 50 
precincts. In addition to their scheduled route drops, FEDs delivered extra ballot cards to 
precincts that had exceptionally high turnouts in the 2000 presidential election. Further, 
the Department staged generic cards in supply vans stationed in each supervisorial district 
and the Department directed the van drivers to also deliver cards to polling places. 



1 Dr Carlton B Goodlett Place - Room 48, San Francisco CA 94102-4634 
Voice (415) 554.4375 Fax (415) 554. 7666 

8 Page 1 of 2 



Attachment III 
Page ^of 2 

The unparalleled size and complexity of San Francisco's ballot resulted in more than 
50,000 "spoiled" ballots compared to approximately 4,000 in the November 2001 
election. The number of cards offered more opportunity for voters to make stray marks 
or to inadvertently complete the incorrect arrow. The large number of spoiled cards 
contributed to inspectors calling the Department requesting more cards beyond additional 
cards the Department planned to and did deliver throughout election day. The 
department responded to these calls. Once voting ended, poll workers assembled the 
voted and unvoted ballots, and deputy sheriffs transported them to our central collection 
point on Pier 29. For November, 100 deputy sheriffs collected the ballots from the 
polling places, with each deputy responsible for a minimum of six precincts. For the sake 
of security, the ballots were sealed in large bags. This meant that the deputies picked up 
and transported bags containing all of the ballot cards for the precinct- including the 
initial allotment of 300 and all additionally delivered ballots - weighing at the least 118 
pounds. 

December 2002 

The ballot for the run-off will consist of one 7 inch by 12 inch card. The small size and 
weight of the ballot simplifies the logistics for getting cards to the polling places. Poll 
workers will need to carry less than thirty pounds when taking 900 ballots to their polling 
site. The Department will be able to distribute to poll workers, in advance of election 
day, sufficient cards to meet all voting needs. To give poll workers 900 ballots for the 
November election would have meant providing them with 12 boxes of cards, weighing a 
total of 264 pounds. 

We will stage the cards and supplies for each precinct at our 240 Van Ness location for 
the poll workers to pick up after their training classes. With a one-card, one-contest 
ballot versus November's four-card, 60-choice ballot, the spoilage rate will be minimal. 
When the FEDs and deputies retrieve cards at the close of polls, a 900-card bundle 
weighing less than 30 pounds presents fewer concerns regarding the physical moving of 
the cards than in November. The light one-card ballot also presents fewer logistical 
challenges for our processing center personnel on Pier 29. 

The FEDs will monitor the actual number of cards remaining at each precinct instead of 
reading the number of cards placed through the eagle machines. This will establish the 
practice of the Department tracking not only the number of voters per precinct during the 
day, but the number of cards that voters are spoiling. 

During the December 10, 2002 run-off, the FEDs will monitor the precincts throughout 
election day until all polls are closed. In November, the FED territories were taken over 
by the Sheriff s deputies around 5 PM. Due to Prop E, the Sheriff s Office did not want 
its deputies to hold the responsibility of carrying unvoted ballots or to have FEDs ride 
with them. Thus, the FEDs left their territories and transferred the use of their vans to the 
deputies. Some poll workers called the FEDs for cards, and did not immediately call the 
Department, causing a delay in communicating the need for cards. Since operational 
redundancy is a necessity in overseeing elections, the FEDs will serve their precincts the 
entire day, and will also have deputies ride with them to close the polling places. 



1 Br Carlton B Goodlett Place - Room 48, San Francisco CA 9 41 02-1634 
Voice (415) 554.4375 Fax (415) 554. 7666 

Page 2 of 2 

81 



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86 



Memo to Finance Committee 

December 4, Finance Committee Meeting 



Item 7 -File 02-1796 

Department: 

Item: 



Services to be 
Performed: 

Description: 



Port 



Resolution approving the Controller's certification that 
Port Area Security Services for the Port of San Francisco 
can continue to be practically performed by a private 
contractor at a lower cost than if the work were performed 
by City employees at budgeted levels 1 . 



Security services at Port facihties 

Charter Section 10.104.15 provides that the City may 
contract with private firms for services which had been 
performed by City employees if the Controller certifies 
and the Board of Supervisors concurs that such services 
can in fact be performed by private firms at a lower cost 
than similar work performed by employees of the City and 
County. 

The Controller has determined that contracting for 
security services at the Port facihties for FY 2002-2003 
would result in the following estimated savings: 



City Operated Service Costs 
Salaries 

Mandatory Fringe Benefits 
Total City Cost 

Contractual Services Costs 



Lowest Salary 
Step 

$566,878 

148.652 

$715,531* 

437.878 



Highest Salary 
Step 

$674,635 

162,450 

$837,085 

439.388 



Estimated Savings 
*Rounding 



$277,653 



$397,697 



1 Deputy City Attorney Noreen Ambrose advises that the above language will be submitted 
by the Port as substitute language to the language contained in the existing resolution. 
However, as of the writing of this report the substitute language has not been submitted to 
the Finance Committee. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

87 



Memo to Finance Committee 

December 4, Finance Committee Meeting 

Comments: 1. According to Ms. Denise Martinez of the Port, Port 

security services are provided at various Port facilities. 
According to Ms. Martinez, such services include (a) 
weekday business-hours patrol of the Ferry Plaza area, 
(b) at least four nightly patrols along the Port's 7.5 miles 
of waterfront, (c) swing and graveyard shift patrols at 
Fisherman's Wharf/Hyde Street Harbor and (d) patrolling 
of Piers 48 and 50 during nights, weekends and holidays. 
In addition, Ms. Martinez reports that services are 
provided for after-hours Port meetings, patrol of Port 
facilities during Waterfront events and guarding of 
facilities when security devices are damaged. 

2. According to Ms. Martinez, the security guard services 
for the Port facilities have been contracted out since 1976. 
However, Ms. Martinez indicates that, to her knowledge, 
the most recent resolution for certification of private 
contracting for Port area security services as required 
under the provisions of Charter Section 10.104.15 was 
submitted to the Board of Supervisors in 1995. Ms. 
Martinez further indicates that since 1996 Port staff 
inadvertently failed to request certification from the 
Controller's Office. Mr. Joe Matranga of the Controller's 
Office advises that the Controller's Office has not received 
a request for certification of this contract under Charter 
Section 10.104.15 from the Port since 1995. 

3. Mr. Matranga states that the Contractual Services 
Costs used for the purpose of analysis is an estimate of 
the total number of security guard service hours of 23,575 
that the Port anticipates using in FY 2002-2003 
multiplied by the Contractor's estimated hourly rate of 
$18.25, plus an estimated $7,634 to $9,144 for Port staff 
contract monitoring costs. 

4. According to Ms. Violet Lee-Fong of the Purchasing 
Division of the Office of Contract Administration, the 
security guard services for the Port are currently being 
provided by McCoy Patrol Service. Ms. Lee-Fong states 
that the original contract with McCoy Patrol Service 
expired on May 31, 1997 and the contract has been 
extended six times since that date. However, Ms. Lee- 
Fong advises that from January 1, 2001 to December 31, 
2001 McCoy Patrol Service continued to provide Port area 
security services without a formal contract extension. Ms. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

88 



Memo to Finance Committee 

December 4, Finance Committee Meeting 



Lee-Fong also states that since January 1, 2002 the 
contract with McCoy Patrol Service has been on a month- 
to-month basis. 

Ms. Lee-Fong states that an Invitations for Bids to 
provide these services was issued on July 10, 2002. Ms. 
Lee-Fong reports that competitive bid submissions for the 
Port security services contract were accepted up until 
September 16, 2002. Ms. Lee-Fong also reports that 
selection of a contractor is now in process and a bidder is 
expected to be selected by approximately December 15, 
2002. Ms. Lee-Fong advises that the new contract period 
will span a two-year period, with the option to renew the 
contract for a third year. 

5. The Controller's supplemental questionnaire with the 
Department's responses is attached to this report. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

89 



;' Attachment 

CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

DEPARTMENT: Port of San Francisco 

CONTRACT SERVICES: Security Guard Services 

CONTRACT PERIOD: 

(1) Who performed the activity/service prior to contracting out? 

Unknown the Port has contracted for services since 1976. No records exist as to whether or how services 
were provided prior the that date 

(2) How many City employees were laid off as a result of contracting out? 
Unknown 

(3) Explain the disposition of employees if they were not la id off. 
N/A 

(4) What percentage of City employees' time is spent of services to be contracted out? 
None 

(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing request for 
contracting out? 

Since 1976. This will be a ongoing request. 

(6) What was the first fiscal year for a Proposition J certification? Has it been certified for each subsequent 
year? 

(7) How-will the services meet the goals of your MBEA/VBE Action Plan? 

Current contractor is an MBE. Contract is in bid process, which includes bid preference discounts under 
Administrative Code Chapter 120.A 

(8) Does the proposed contractor provide health insurance for its employees? 

Current contractor provides health insurance. New contractor is required to meet HCAO requirements. 

(9) Does the proposed contractor provide benefits to employees with spouses? If so, are the same benefits 
provided to employees with domestic partners? If not, how does the proposed contractor comply with the 
Domestic Partners ordinance? , 

Current Contractor does not provide benefits to spouses. Contract bid requires submitted Chapter 12B 
compliance forms 

(10) Does the proposed contractor pay meet the provisions of the Minimum Compensation Ordinance? 
Current contractor meets requirements. New contract contains MCO requirement 

Department Representative: _Denise Martinez 

Telephone Number: _274-0521 

90 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

Item 8 - File 02-1836 



Department: 
Item: 



Services to be 
Performed: 



Juvenile Probation 

Resolution concurring with the Controller's certification 
that intake and shelter services for status offenders can 
continue to be practically performed by a private 
contractor for lower cost than similar services performed 
by City and County employees. 

Shelter and intake services for status offenders 



Description: 



Charter Section 10.104.15 provides that the City may 
contract with private firms for services, if the Controller 
certifies, and the Board of Supervisors concurs, that such 
services can be practically performed by private firms at a 
lower cost than similar work by City and County 
employees. 

The Controller has determined that contracting for the 
shelter and intake services for status youth offenders for 
FY 2002-03 would result in estimated savings as follows: 



City Operated Service Costs 

Salaries 

Fringe Benefits 

Total City Cost 

Contractual Services Costs 



Low 

$815,296 

234,841 

$1,050,137 

769.968 



High 

$996,354 

262,289 

$1,258,644* 

795,902 



Estimated Savings 
*Rounded 



$280,169 



$462,742 



Comments: 



1. Mr. Lonnie Holmes of the Juvenile Probation 
Department reports that the Juvenile Probation 
Department first, entered into a contract with Huckleberry 
Youth Programs (formerly known as Youth Advocates, 
Inc.) in 1984 to provide a community-based central 
receiving facility for status offenders. According to Mr. 
Holmes status offenders are youth who have run away 

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Memo to Finance Committee 

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from home, have a history of truancy, or are in other ways 
out of their parents' control, but who are not in the 
criminal justice system. Mr. Holmes advises that prior to 
the contract with Huckleberry Youth Programs to provide 
the community-based central receiving facility services, 
such status offenders were retained in Juvenile Hall. 

According to Mr. Holmes, in 1989 the Juvenile Probation 
Department expanded the services provided under the 
contract with Huckleberry Youth Programs to include 
intake and shelter services for status offenders. Mr. 
Holmes reports that Huckleberry Youth Programs 
currently provides a 24-hour short-stay shelter and needs 
assessment for youth, with the goal of reuniting youth 
with their family or providing appropriate longer-term 
placement. 

2. Mr. Holmes reports that the Department first entered 
into a contract to provide a central receiving facility for 
status offenders in 1984, the year in which the central 
receiving facility was first certified under Charter Section 
10.104.15. The expanded intake and shelter services 
contract was first certified by the Controller under Charter 
Section 10.104.15 in 1989, and intake and shelter services 
have been continuously provided under the outside 
contract since then. 

3. The Contractual Services Costs used for the purpose of 
this analysis are based on the Juvenile Probation 
Department's estimate of the FY 2002-2003 contractual 
costs for intake and shelter services for status offenders, 
including the salary and fringe benefits of 1.0 FTE 8444 
Deputy Probation Officer responsible for monitoring the 
contract. 

4. The Controller's supplemental questionnaire with the 
Juvenile Probation Department's responses is shown in 
the attachment to this report. 



Recommendation: Approve the proposed resolution. 



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92 



Attachment 
rage 1 of 2 
CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

! DEPARTMENT: Juvenile Probation Department 

CONTRACT SERVICES: Status Offender Services 

CONTRACT PERIOD: Julv'1, 2002 to June 30. 2003 

(1) Who performed the activity/service prior to contracting out? 

The Juvenile Hall Counselors: 3-8315 Assistant Counselors 7-3320 Counselors, 
1-8316 Counselor II 

(7 j How many City employees were laid off as a result of contracting out? 

None. Eleven (1 1 ) positions were cut from the Eudg'et. No permanent staff were laid off 

(i : Explain the disposition of employees if they were not laid off. 

; No permanent employees were laid off. 

{&, " What percentage of City employees' time is spent oaservices to be contracted out? 

50% of 1-8414 Supervising Probation Officer 100% of 2- 8315 Counselor II 

100% of 1-8442 Senior Probation Officer 100% of 14 -3320 Counselor 

1 00% of 3-8440 Probation Officer 

(J i How long have the services been contracted out? Is this likely to be a one-time or an ongoing request for 
contracting out? 

The contract with Huckleberry Youth Programs, Inc., for a central receiving facility was first entered into by 
the Juvenile Probation Department February 1, 1934. The contract expanded to include shelter and 
intake for status offenders on April 1, 1988. This agreement is on-going and the Department expects to 
continue to contract these services out. 



[i ) What was the first fiscal year for a Proposition J certification? Has it been certified for each subsequent 
year? 

The first year for the central receiving contract was fiscal year 1 983/84. The first year for the expanded 
contract was fiscal year 1 983/89. This contract has been renewed each subsequent year. 

{]') How will the services meet the goals of your MBEA/VBE Action Plan? 

Huckleberry Youth Programs, Inc. is a non-profit agency therefore, it dees not fall within purview of 
MBE/WBE goals. Extensive outreach was accomplished at the Request for Qualification when the 
Department was seeking potential MBE/WBE providers. 

(SO Does the proposed contractor provide health insurance for its employees? 

Yes. The contractors provides health benefits to all it's employees. 



93 



A ttachment 
Page 2 of 2 
(5) Does the proposed contractor provide benefits to employees with spouses? If so, are the same benefits 
provided to employees with domestic partners? If not, how does the proposed contractor comply with the 
Oomestic Partners ordinance? This contractor is in compliance with all city mandates regarding benefits 
to employees, spouses and domestic partners. 



(*iC) Does the proposed contractor pay meet the provisions of the Minimum Compensation Ordinance? 
This contractor is in compliance with the City's Minimum compensation Ordinance. 

Department Representative: Lonnie S. Holmes 
Telephone Number 415-753-7852 



94 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

Item 9 - File 02-1839 



Department: 
Item: 



Amount: 



Redevelopment Agency 

Resolution approving an amendment to the budget of the 
Redevelopment Agency of the City and County of San 
Francisco for Fiscal Year 2002-2003 by (a) increasing the 
Redevelopment Agency's Expenditure Authority in an 
amount not to exceed $43,100,000; (b) authorizing the 
Redevelopment Agency's issuance of Tax Allocation 
Bonds, in one or more series, each in either variable or 
fixed rate mode, in an amount not to exceed $43,100,000; 
(c) authorizing the Redevelopment Agency's receipt of 
additional tax increment monies necessary to repay the 
principal and interest on said bonds; and (d) approving a 
Cooperation and Tax Increment Reimbursement 
Agreement 1 between the City and the Redevelopment 
Agency with respect to the Yerba Buena Center 
Redevelopment Project Area. 

Not to exceed §43,100,000 



Source of Funds: 
Description: 



Tax Allocation Bonds 

Under the proposed resolution, (a) the Redevelopment 
Agency would issue Tax Allocation Bonds in an amount 
not to exceed $43,100,000, to finance improvements at 
Jessie Square, including construction of the Jessie Square 
open space, the Jessie Square Parking Garage, and 
improvement to the substructures and the foundations of 
the proposed Mexican Museum and Magnes Museum as 
part of the Redevelopment Agency's Yerba Buena Center 
Redevelopment Project Area; (b) increase the 
Redevelopment Agency's expenditure authority for the FY 
2002-2003 budget in an amount not to exceed 
$43,100,000; (c) approve authorization of the 
Redevelopment Agency's receipt of additional tax 
increment revenues necessary to repay the principal and 
interest on the Tax Allocation Bonds commencing in FY 
2004-2005; and (d) approve a Cooperation and Tax 



1 Approval of the proposed resolution would create a Cooperation and Tax Increment Reimbursement 
Agreement between the Redevelopment Agency and the City. This agreement sets obligations 
regarding the use of the Jessie Square Parking Garage revenues and repayment of tax increment 
revenues. 

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Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Increment Reimbursement Agreement between tbe City 
and tbe Redevelopment Agenc3 r with respect to tbe Yerba 
Buena Center Redevelopment Project Area. 

The Redevelopment Agency's authority to issue the 
proposed $43,100,000 in Tax Allocation Bonds comes from 
Article XVI, Section 16 of the California Constitution and 
Sections 33640 and 33670 of the California Health and 
Safety Code (the Community Redevelopment Law). Under 
Sections 33640 and 33670 of the Community 
Redevelopment Law, the Redevelopment Agency is 
authorized to issue Tax Allocation Bonds to pay for the 
cost of financing construction of improvements for its 
redevelopment projects. 

According to Mr. Mario Menchini of the Redevelopment 
Agency, the general provisions of the sale of the Tax 
Allocation Bonds would be as follows: (a) the sale of the 
first series bonds is tentatively scheduled for February 28, 
2003; (b) the sale of the second series bonds is tentatively 
scheduled for March 14, 2003; (c) the bonds would be 
issued at a fixed interest rate not to exceed 8.0 percent; 
and (d) the final maturity date of the subject bonds will be 
August 1, 2018. 

The subject Tax Allocation Bonds would be used to 
partially fund construction of Jessie Square, a new Jessie 
Square Parking Garage, and construction of the 
foundations of the proposed Mexican Museum and the 
proposed Magnes Museum. Jessie Square, on block CB-1 
(Assessor's Block 3706), is located on the north side of 
Mission Street, between Third and Fourth Streets. The 
proposed project includes construction of a 161,600 square 
feet underground parking garage, with approximately 450 
parking spaces. The proposed underground parking 
garage would be partially under (a) the proposed Mexican 
Museum, (b) the proposed Magnes Museum, and (c) the 
Jessie Square open space facing Mission Street. The 
proposed Jessie Square Garage, a four level underground 
parking garage, would contain approximately 450 parking 
spaces, of which 65 to 70 parking spaces will be leased by 
the developer, Millennium Partners, for 30 years (See 
Comment No. 5) 



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Improvements to the Yerba Buena Center Redevelopment 
Area, which will include Jessie Square, include 
pedestrian-oriented gardens, cultural, recreational, 
convention and retail attractions. The design of Jessie 
Square open space includes pedestrian linkages to Yerba 
Buena Lane and Third Street, as well as access to the 
Magnes Museum, the Mexican Museum, and St. Patrick's 
Church. The proposed improvements include stone 
paving, performance areas, fixed and cafe style seating, 
trees, lighting, and an artist-designed water feature. The 
proposed project also includes reinforcement and 
improvements to the substructures of the Magnes 
Museum and the Mexican Museum, since part of the 
proposed Jessie Square Garage will be located below the 
museums. 

The total estimated project costs will be $42,309,624, as 
shown in Attachment I, provided by the Redevelopment 
Agency. In addition to the $34,900,000 in construction 
fund proceeds from the Tax Allocation Bonds, the balance 
of the total project cost of $7,409,624 (S42, 309,624 less 
bond financing of $34,900,000) for the proposed Jessie 
Square Garage and improvements will be financed in the 
following manner: (a) $4,529,624 from the sale of 
Transferable Development Rights (TDR) (see Attachment 
II) of the Jessie Square Substation and the historic 
Planters Hotel; (b) $380,000 from proceeds from the sale 
of Redevelopment Agency land to the Magnes Museum; 
and (c) $2,500,000 in developer equity. Attachment II is a 
memorandum provided by the Redevelopment Agency 
that explains how the sale of Transferable Development 
Rights would provide monies for the proposed project. 
According to Mr. Carney, the $4,529,624 in TDRs will be 
provided from the following sources (a) $3,420,000 from 
the sale of TDR to Millennium Partners from the historic 
Jessie Square Substation Building owned by the 
Redevelopment Agency, (b) $629,624 from an additional 
sale of Jessie Square Substation TDR to Millennium 
Partners; and (c) $480,000 would be from the sale, by 
Millennium Partners, of TDR from the historic Planters 
Hotel; such TDR have been donated by the owner of the 
Planters Hotel, located at 600 Folsom Street, to the 
Magnes Museum which has agreed to convey the TDR to 
the Redevelopment Agency for this purpose. (See 
Comment No. 3). 
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Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



The proposed resolution would authorize approval of a 
Cooperation and Tax Increment Reimbursement 
Agreement between the City and the Redevelopment 
Agency. The Cooperation and Tax Increment 
Reimbursement Agreement obligates the Redevelopment 
Agency to reimburse the City for all tax increment 
revenues which would be used to pay the debt service of 
the Tax Allocation Bonds. Under the terms of the 
proposed Cooperation and Tax Increment Reimbursement 
Agreement, the Redevelopment Agency will establish a 
separate "Garage Fund" where all parking revenues from 
the Jessie Square Garage will be deposited. The 
Redevelopment Agency will use a combination of parking 
revenues from the proposed garage and Parking Tax 
revenues from the proposed garage to reimburse the 
City's General Fund (See Comment No. 1). 

Budget: Attachment I, provided by the Redevelopment Agency, 

includes a summary budget, which identifies both the 
revenue sources and expenditures for the proposed 
project. As previously noted, total project costs are 
$42,309,624, including $15,241,105 for the Jessie Square 
improvements and $27,068,519 for the Jessie Square 
Parking Garage, as shown in Attachment I. Attachment I 
also contains funding (budget) sources for the proposed 
project expenditures of $42,309,624. According to Mr. Bill 
Carney of the Redevelopment Agency, the reason the 
issuance of the Tax Allocation Bonds is not to exceed 
$43,100,000, or $790,376 more than the estimated total 
project cost of $42,309,624, is because the Redevelopment 
Agency wanted to maintain flexibility and minimize the 
impact on the City's General Fund in the event the sale of 
TDRs did not realize all anticipated revenues. 

As shown in Attachment III, provided by the 
Redevelopment Agency, $34,900,000 of the $43,100,000 
Tax Allocation Bonds are estimated to be available for the 
proposed project. The difference of $8,200,000 
($43,100,000 less $34,900,000) is the estimated costs of 
issuance of the bonds, the underwriter's discount, funding 
of a capitalized interest fund (to pay interest costs before 
the project begins producing revenue), bond insurance, 
and a reserve account, which is a reserve fund for debt 
service for the proposed Tax Allocation Bonds. According 
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Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

to Mr. Menchini, these costs include 16 months of 
capitalized interest on the bonds for the cultural and open 
space portion of the project, 30 months of capitalized 
interest on the bonds for the Jessie Square Garage 
portion of the project, and a debt service reserve of 10 
percent that could be used to pay for the final year of debt 
service on the Tax Allocation Bonds. The details for the 
$8,200,000 are shown in Attachment III. 

Comments: 1. According to Mr. Menchini, the Tax Allocation Bonds 

would be repaid from tax increment revenues, of which 
approximately 65 percent would normally accrue in the 
City's General Fund. According to Mr. Menchini, the use 
of tax increment revenues to service the debt on the Tax 
Allocation Bonds would not begin until Fiscal Year 2004- 
2005, since the Redevelopment Agency will have sufficient 
capitalized interest to pay bond debt service through FY 
2003-2004. Under the proposed Cooperation and Tax 
Increment Reimbursement Agreement, between the City 
and the Redevelopment Agency, the Redevelopment 
Agency will reimburse the City for all tax increment 
revenues used for debt service, through biannual 
payments to the City during the period of 2005 through 
2021. Such reimbursements will include amounts which 
would normally accrue in the City's General Fund 
(approximately 65 percent of the total tax increment 
revenues to be provided for debt service) and those which 
would normally accrue to other taxing entities, such as 
Property Tax proceeds otherwise payable to the San 
Francisco Unified School District (SFUSD) and the San 
Francisco Community College District (SFCCD), 
according to Mr. Menchini. 

Under the proposed Cooperation and Tax Increment 
Reimbursement Agreement, such reimbursements would 
be paid back to the City from parking revenues, 
Possessory Interest Taxes, and Parking Taxes generated 
by the proposed Jessie Square Garage by December 31, 
2018. As shown in Attachment rv, garage parking 
revenue and tax receipts will cover all outstanding debt 
service related to the Tax Allocation Bonds by 2018. As 
shown in Attachment IV, the final debt service payment 
by the Redevelopment Agency requiring tax increment in 
the amount of $992,872 occurs in 2018. However, the 
garage revenues will not be sufficient to cover the tax 
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Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



increment revenues which would normally accrue in the 
City's General Fund starting in year 2011 and ending in 
2017, as shown in Attachment IV, as represented by a 
$255,863 balance in 2011 and ending with a balance of 
$561,856 in 2020. Therefore, under the terms of the 
Cooperation and Tax Increment Reimbursement 
Agreement, any shortfalls in revenues, which would 
normally accrue in the City's General Fund, by the 
Redevelopment Agency to make the General Fund whole 
will be repaid with interest at an annual compounded rate 
of five percent until the Redevelopment Agency's 
reimbursement obligation is satisfied. 

As shown in Attachment IV, the City will no longer 
provide tax increment revenues to the Redevelopment 
Agency past 2018 when the debt service for the bonds are 
fully paid. As previously noted, the final debt service 
payment by the Redevelopment Agency related to the Tax 
Allocation Bonds is in 2018. However, the City will not be 
fully reimbursed until 2021. As explained in Attachment 
V, a memorandum provided by Mr. Carney, the reason for 
this is because the Redevelopment Agency "proposes to 
use $870,000 in parking garage revenue for 
approximately three years, beginning in 2019, to replace 
ground lease revenues". Such ground lease revenues are 
now paid to the Redevelopment Agency for the Moscone 
Convention Center. The ground lease will expire in March 
of 2018, as explained in Attachment V. Therefore, the 
reduction in parking garage revenues, will result in the 
Redevelopment Agency's reimbursements to the City for 
the tax increment revenue, which would have otherwise 
accrued to the City's General Fund, to continue for an 
additional three years after the Tax Allocation Bond debt 
service is fully paid. Since the reimbursement to the City 
will not be complete until three years after the debt 
service period for the Tax Allocation Bonds, the Budget 
Analyst considers the proposed resolution to be a policy 
matter for the Board of Supervisors. 

2. According to Mr. Menchini, the Redevelopment Agency 
expects to issue the proposed Tax Allocation Bonds in two 
series, on February 28, 2003 and March 14, 2003. Mr. 
Menchini advises that the Tax Allocation Bonds would 
have a fixed interest rate, not to exceed eight percent. 
Attachment IV, provided by Mr. Menchini, shows the debt 
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BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



service schedule for the proposed Tax Allocation Bonds. 
As shown in Attachment IV, the total debt service over 14 
years is $52,888,997, or an average annual debt service of 
$3,777,785. 

3. As shown in Attachment I, $4,529,624 for the proposed 
project will be generated from TDR sales. According to 
Mr. Carney, the applicable sales have not yet occurred, 
although they are required by Redevelopment Agency 
Disposition and Development Agreements now in place. 
Mr. Carney further advises that for the TDR sales to 
occur, the City's Planning Code and the City's General 
Plan Downtown Element must be amended, because the 
transfer of such development rights would be between 
different zoning districts (from a C-3-R, or Downtown 
Retail zoning district to a C-3-0, or Downtown Office 
zoning district). Such transfers are presently not 
permitted in either the Planning Code or the Downtown 
Element of the City's General Plan. Currently, two 
ordinances (File Nos. 02-0327 and 02-0328) are pending 
before the Board of Supervisors Neighborhood Services 
and Recreation Committee, which would amend the 
Planning Code and the Downtown Element to permit the 
necessary TDR sales to occur. According to Mr. Carney, if 
the pending ordinances amending the Downtown Element 
and the Planning Code (File Nos. 02-0327 and 02-0328) 
are not approved by the Board of Supervisors, the 
Redevelopment Agency will attempt to sell the TDRs for 
use in a C-3-R zoning district which is permitted under 
the current City Planning Code and Downtown Element 
of the City's General Plan. Mr. Carney advises that if the 
pending ordinances are not approved by the Board of 
Supervisors, the TDR revenue could be less than the 
$4,529,624 estimated in Attachment I, since the proposed 
project TDR sales, to Millennium Partners, are above 
current market value. Therefore, the Budget Analyst 
notes that all of the financing sources for the proposed 
Project have not yet been secured. Because such financing 
sources would be dependent on Board of Supervisors 
approval of pending legislation, the Budget Analyst 
considers approval of the proposed resolution to be policy 
matter for the Board of Supervisors. 

4. According to Mr. Carney, Millennium Partners was 
selected through a Request for Proposals process in 1995 

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Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



to develop the Redevelopment Agency's CB-1 Market 
Street parcel, which included the Four Seasons Hotel and 
Condominiums and related retail development. The 
Disposition and Development Agreement negotiated with 
Millennium Partners as a result of the RFP included the 
potential for the development to include a parking garage 
under Jessie Square, with the construction of the Square 
and foundations for the adjacent cultural facilities. 
According to Mr. Carney, the General Contractor portions 
of the proposed project was put out to bid by Millennium 
Partners, assisted by the Redevelopment Agency's 
Contract Compliance Division through a Request for 
Qualifications (RFQ) process to select the construction 
General Contractor. According to Mr. Carney, Plant 
Construction/Ruiz Construction Company will serve as 
the General Contractor for the construction of the Project. 
According to Mr. Carney, the design architect for the 
Project is Gary Handell Associates, which was selected by 
Millennium Partners, in accordance with the contract 
compliance provisions of the Disposition and Development 
Agreement (DDA) between the Redevelopment Agency 
and Millennium Partners. Gary Handell Associates was 
selected because of their extensive experience, technical 
ability, and understanding of the Yerba Buena Center 
Redevelopment Project Area advises Mr. Carney. Mr. 
Chris Inglesias of the Redevelopment Agency provided 
Attachment VI, which contains a list of the bidders for the 
General Contractor and the selection process for the 
General Contractor and the design architect for the 
proposed Jessie Square Project. According to Mr. Carney, 
the proposed budgeted amounts for work to be 
constructed by the General Contractor and their 
subcontractors is $30,451,623. 

5. Millennium Partners, the developer of the Jessie 
Square Project, entered into a Disposition and 
Development Agreement (DDA) with the Redevelopment 
Agency. Under the DDA with the Redevelopment Agency, 
approximately 65 to 70 of the 450 parking spaces in the 
proposed Jessie Square Garage will be leased, for 30 
years, to the developer, Millennium Partners. According 
to Mr. Carney, the Disposition and Development 
Agreement was not subject to Board of Supervisors 
approval but was subject to Redevelopment Agency 
Commission approval. According to Mr. Carney, the 
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spaces leased will be located at tbe top, or mezzanine, 
level of tbe Jessie Square Garage. According to Mr. 
Carney, Millennium Partners will pay a minimum of 
$689,000 per year to tbe Redevelopment Agency for up to 
approximately 70 spaces (70 spaces @ $7,700 per space, 
per year, plus $150,000 per year for financing premiums). 

6. As explained in Attachment VII, provided by Mr. 
Menchini, tbe Redevelopment Agency will provide a 
record for all garage financial transactions, provide tbe 
City with net garage revenues, and tbe remaining 
Redevelopment Agency obligations to tbe City, and tbe 
Redevelopment Agency will work witb tbe Controller's 
Office to determine tbe amount of the tax increment 
revenues which the Redevelopment Agency has been 
reimbursing the City's General Fund. 

7. In reviewing the Cooperation and Tax Increment 
Reimbursement Agreement between tbe City and the 
Redevelopment Agency, the Budget Analyst has 
concluded that the language contained in the agreement 
is extremely broad and does not specifically state that the 
City's General Fund will be fully reimbursed by the 
Redevelopment Agency from parking revenues, 
Possessory Interest Taxes, and Parking Taxes generated 
by the proposed Jessie Square Garage. Instead, the 
agreement refers to reimbursement of "the City". In this 
connection, the Budget Analyst notes that in accordance 
with the City's Charter, approximately 40 percent of the 
Parking Tax revenue that would be counted as a 
reimbursement to the "City" would be payable to the 
Municipal Transportation Agency Fund, and not the 
General Fund. 

Further, specific language is not included in the 
agreement that supports the Redevelopment Agency's 
statement that the City's General Fund will re er\ 
reimbursements which include the amounts which would 
normally accrue in the City's General Fund 
(approximately 65 percent of the total tax increment 
revenues to be provided for debt service) and those which 
would normally accrue to other taxing entities, such as 
Property Tax proceeds otherwise payable to the San 
Francisco Unified School District (SFUSD) and the San 
Francisco Community College District (SFCCD). 
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The Budget Analyst recommends that the proposed 
resolution be continued and that the Cooperation and Tax 
Increment Reimbursement i\.greement between the City 
and the Redevelopment Agency be rewritten to specify 
that a) the City's General Fund (as opposed to "the City") 
is fully reimbursed for tax increment revenue diverted 
from the General Fund to repay the debt service for the 
Redevelopment Agency's Tax Allocation Bonds, and that 
b) the City's General Fund will receive reimbursements 
which include the amounts which would normally accrue 
in the City's General Fund and those which would 
normally accrue to other taxing entities, including the 
SFUSD and the SFCCD. The Budget Analyst further 
recommends that the City Attorney and the Controller 
certify that the amended language of the Cooperation and 
Tax Increment Reimbursement Agreement is clear and 
sufficient to accomplish the stated intent of the agreement 
as specified in a) and b) above. 

Recommendations: 1. Continue the proposed resolution so that the 

Cooperation and Tax Increment Reimbursement 
Agreement can be rewritten to clearly specify that a) the 
City's General Fund (as opposed to "the City") is fully 
reimbursed for tax increment revenue diverted from the 
General Fund to repay the debt service on the proposed 
Redevelopment Agency Tax Allocation Bonds, and b) the 
City's General Fund will receive reimbursements which 
include the amounts which would normally accrue in the 
City's General Fund and those which would normally 
accrue to other taxing entities, including the SFUSD and 
the SFCCD. 

2. Request that the City Attorney and the Controller 
certify that the amended language of the Cooperation and 
Tax Increment Reimbursement Agreement is clear and 
sufficient to accomplish the stated intent of the agreement 
as specified in Recommendation 1, above. 



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BUDGET ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



3. Approval of the proposed resolution is a policy matter 
for the Board of Supervisors because a) the 
reimbursement to the City by the Redevelopment Agency 
for the tax increment revenue which would otherwise 
accrue to the City's General Fund, will not be complete 
until three years after the debt service for the Tax 
Allocation Bonds is fully repaid due to the use of $870,000 
annually to replace Moscone Convention Center ground 
lease revenues which will expire in 2018 (see Comment 1), 
and b) $4,529,624 for the proposed project will be 
generated from Transferable Development Rights (TDR) 
sales that would only be permitted if pending legislation 
to amend the Planning Code and the Downtown Element 
to permit the necessary TDR sales to occur are approved 
by the Board of Supervisors. The pending ordinances (File 
Nos. 02-0327 and 02-0328) have been referred to the 
Board of Supervisors Neighborhood Services and 
Recreation Committee and have not yet been scheduled 
for a hearing (see Comment 3). 



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105 



Attachment I 



JESSIE SQUARE IMPROVEMENTS 
PROJECT SOURCES & USES SUMMARY 



11/1/2002 



BUDGET SOURCES 

Tax Allocation Bond Proceeds* 

Garage Portion 

Public Improvements Portion 

Land Sale 

Pavilion Parcel Sale 

Transferable Development Rights (TDR) 

Basic Substation TDR Sale 
Additional Subsation TDR Sale 
Planters Hotel TDR Sale 

Developer Equity Contribution 

Pre-development sunk costs 

Total Budget Sources 



$20,200,000 
S 14.700,000 



$ 380,000 



$ 3,420,000 
S 629,624 
S 480,000 



S 2,500,000 



S 34,900,000 

$ 380,000 

$ 4,529,624 

$ 2,500,000 

| $ 42,309,624 



BUDGET USES 

Public improvements 

Jessie Square 

Magnes Museum Substructure & Preservation 

Mexican Museum Substructure 

Garage Improvements 

Garage 

Garage Elevator Structure @ St. Patrick's 

Garage Truck Loading Area @ Argent 

Total Budget Uses 



$ 3,733,664 
S 6,291,074 
S 5,216,367 



5 24,689,660 
S 495,428 
$ 1,883,431 



$ 15,241,105 



$ 27,068,519 



$ 42,309,624 



* Tax Increment Bond Proceeds are construction funds only. For Bond Financing costs see 
separate Sources & Uses chart for Bonds 



106 



^^__ fi _ Attachment II 

San Francisco \ CJ I f7 I wiiiELBwwK.4ii.ijaj. 

Redevelopment Agency I II ill nwwiiw.sa&n,pr«aMi 

I \._ J I I Kimrvn C, Paiamouiualn vies PkWmi 

_., M „_. **-^r.A fe «%—^ Marie Dunlnp 

S3rFranclsro,CA94102 \ \ | RunaitRer*. 

I ■ tn I / \ 1 Darahai sineft 

413.745.2400 L - i 'Jbmtr " 

TTY 41:745^500 Kill: Scan. Essutlve Dlrs:tsf 

November 21, 2002 112-12202-023 

To: Brace Robertson 

Harvey M Rose Accountancy Corp. 

1390 Market St # 1025, San Francisco, CA 94102 

From: Bill Carney 

Senior Project Manager. San Francisco Redevelopment Agency 

Subj ecfc Transferab le D evelopmeni Rights 

This memorandum responds to tlie request from your office for a simple description of 
Transferable Development Rights ( ;: TDR's) as provided by the San Francisco Planning Code. 
TDRs provide an imp o rtant source of funds for a portion of the Jessie Square Improvements, the 
proposed financing of Which is now being analyzed by your office, 

TDRs are a mechanism set up by the San Francisco Planning code for selling the development 
rights from a "preservation parcer containing a historic building to a "development parcel" 
decreasing the amount of development that can occur on the first site and increasing that which 
can occur on the second site by the same amount This compensates the owner of the historic 
building for preserving the historic building on a site, which could otherwise be demolished and 
developed for a larger building. Conversely, it allows the purchaser of the TDRs to build a 
larger building on the development parcel than would otherwise be allowed. TDRs are sold by 
the square foot at rates determined by the market. Sales are certified and recorded by the 
planning department, 

As an example, the proposed funding for the Jessie Square Improvements includes 54,529,624 
from the sale of TDRs by the Agency to Millennium Partners. These development rights derive 
from two historical buildings in the Yerba Btiena Center Redevelopment Area: 168,281 square 
feet from the Jessie Street Substation site and 19.200 square feet from the Planters' 
Eotel site, Millennium Partners intends to use the TDRs to increase the amount of development 
allowed on a site on Mission Street between Fremont and Beale Streets. 

Please call me at 749-2412 with any additional questions. 



107 



Attachment I 



San Francisco Redevelopment Agency 

2003 Series A& B Tax Allocation Revenue Bonds 

(Jessie Square Garage and Cultural St Open Space Improvements) 

Sources and Uses of Funds 



Pa: Value of Bonds [1] 


543,100,000 


Uses: 




Deposit to Construction Fund 


34,900,000 


Deposit to Capitalized Interest 


3,074,182 


Deposit to Reserve Account 


4,310,000 


Deposit to Costs of Issuance [2] 


126,709 


Bond insurance [3] 


473.609 


Underwriter's discount [4] 


215,500 


Total uses of funds 


543,100,000 



Notes 
[1] hterss; paid 2/1 and 8/1 and principal 8/1. final maturity 20 IS, dated and delivered 2/28/03, 
[2] Includes legal expenses, financial advisory fees, printing fees, trustee fees and other miscellaneous expenses. 
[3] Bond imurar.ee assumed to be .75% of total debt service, purchased in advance. 
[4] Underwriter's discount assumed to be .£ % of par or S5.00 per $1,000 bond, 



11/18/2002 108 



Attachment IV 





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109 



San Francisco 

Redevelopment Agency 

770 Guidon Gets Avsnue 
Jan Francisco, CA 94102 



415 749.2/00 

TTY 415743.2300 




Attachment V 

WILLIE L. BROWN, JR. Meyor 

Mitneje w. Sexun, Present 

Kalhryn C. Palamcuntaln, VIcaPrejIdMI 

Mark r .- : ; 

Loray K|nj 

Ramon £. Romero 

Duafian Singh 

Benny f.»a 

Mania, teen, Executive oiroticr 



To: Harvey Rose : Budget Analyst 

Harvey Rose Accountancy Corp. 

From: William Carney. Senior Project Manager 

Date: November 22, 2002 

Subject: Replacement of Moscone Lease Payments 

As requested by your office, this memorandum provides further background on the 
Agency's proposed use of revenues from the proposed Jessie Square Garage to replace 
Moscone Convention Center Ground Lease revenue to continue to fund maintenance for 
the Yerba Buena Gardens beginning in 2019. 

On March 1, 1988, the Redevelopment Agency signed a 30-year ground lease agreement 
with the City for the Moscone Convention Center. Under the terms of the 1988 ground 
lease agreement, the City currently pays the Redevelopment Agency an annual payment 
of $870,000. The lease agreement expires in March of 2018, and this source of revenue 
will therefore no longer be available to help pay for Yerba Buena Gardens maintenance 
and capital replacement needs, 

The Agency has therefore proposed to use 5870,000 in garage revenue for approximately 
three years, beginning in 2019 to replace the ground lease revenues. A recently 
completed capital maintenance study of Yerba Buena Gardens by 3DI International 
indicates an on-going critical need for these fluids, especially as the facilities age, The 
Gardens, which include both the public open space and the cultural facilities, will have 
been in service for twenty- five years by 201 9, Capital maintenance, repair and 
replacement are therefore expected to be a critical need at that point. 



110 



San Francisco 
Redevelopment Agency 

770 Golden Sate Avenue 
San Francisco, CA 94102 



415.749.2400 

TTY 415.749.2500 




Attachment VI 
Page 1 of 2 



WILUE !.. EROWN, JF , Maysr 

Mlclulle W. Sextoi. Prsjldsit 

Kainrvn C Pctlpjnoun'alr, vim Prwidiim 

Msrt Ounl»p 

broy Kino 

Ramon E. Rorraro 

Parian Shod 

3anny V, Yss 

M:r:l3 Rcsbq, exacjUvc Olrettef 



November 22, 2002 

To: Harvey Rose, Budget: Analyst 

From: Chris Iglesias, Contract and Fiscal Services Manager 

RJ£: General Contractor Selection Process for the Jessie Square Parking Garage and 
Related Structures 

In 1995 the Agency issued a Request for Proposals (RFP) for development of the Market 
Street parcel in the Yerba Buena Center Redevelopment Project Area. As a result of this 
process, the Agency Commission selected Millennium Partners to develop the Four 
Seasons Hotel and Condominiums, with related retail, parking and other improvements. 
The Disposition and Development Agreement (DDA) negotiated with Millennium 
included the potential for the development to include a parking garage under Jessie 
Square, with the construction of the Squate and foundations for the adjacent cultural 
facilities. 

In August of 2000 Millennium Partners issued a Request For Qualifications (RFQ) for 
Construction Services for the Jessie Square Parking Garage, Plaza and structures for the 
Mexican and Magnes Museums. 

The RFQ followed the Agency's contracting guidelines as outlined in the DDA with 
Millennium Partners. These guidelines include extensive good faith effort steps (1 1) to 
ensure that minority and woman-owned business enterprises have an equal opportunity to 
compete for and participate in contracts for the planning, design and construction of the 
buildings (and garage). 

As outlined in the good faith effort steps, Millennium Partners advertised the RFQ in the 
City's Bid and Contracts Newsletter, conducted site visits with prospective contractors 
and mailed the RFQ to organizations that serve the M/WBE contracting community. An 
added feature to the process included Milleiuiium's commitment to try to include 
M/WBE participation at the prime contractor level. 



Ill 



Attachment V] 
Page 2 of 2 



This added feature is different from the requirements outlined in the DDA, which focuses 
on M/WBE participation at the subcontractor level. On September 20, 2002 the 
following eight contractors submitted qualifications: 

1 . Clark Construction 

2. Dennis J, Amoroso Construction 

3. G.M.I. Construction 

4. Ruiz Construction 

5. McCarthy Building Companies 

6. Plant Construction 

7. Ricblen Construction 

S . S J, Amoroso Construction 

The following five contractors were invited to participate in the interview process: 

1 . G.M.L Construction 

2. Ruiz Construction 

3. McCarthy Building Companies 

4. Plant Construction 

5. Richlen Construction 

At the completion of the interview process the firms were ask to provide company 
financial statements and proposed budgets. Based on this information Millennium 
selected Plant Construction and Ruiz Construction as it main connector for the Garage, 
Plaza and superstructures. This process also satisfied the Agency's goal of having an 
MBE contractor participate at the prime level. 

The prime team will bid out all of the sub-trades following the above referenced 
guidelines. 

The lead architectural firm is Gary Handell & Associates. The subconsultant portion 
includes 27 percent MBE participation and 13 percent WBE participation. Gary Handell 
was selected for the work because of their experience with the CB-1 Four Seasons, Yerba 
Buena Lane Connector and the Sony Metreon projects, their intimate knowledge of the 
area, and their proven ability to accomplish complex urban designs. 



112 



San Francisco 
Redevelopment Agency 



770 Goldan Sate Avenue 
San Francisco. CA 94102 



* 15.749.24)0 
17*415.7*9.2500 




Atta chi.ier t VII 

WILLIE L BflOWN. .R„ Mayor 

Mlcnelle W SsxUn. Prasldwi 

Kainryn t PaiMouniJln, Wca Prjjldsrrt 

Mark Cunlsp 

laroy Kino 

Ra/nen 5, fiopisra 

Oa/inan Slnsn 

Beany Y, We 

Matctt Rosea Eificuriva Directs? 



To: Bruce Robertson 

Harvey Rose Accountancy Corp. 

From: Mario Menchini 

Senior Financial Analyst 

Date; November 22, 2002 

Subject; Accounting & Reporting Requirements Associated with the Jessie Square 

Open Space and Parking Garage Financing 

Per your request, the Agency is submitting this memo to further clarify the accounting & 
reporting requirements associated with the Jessie Square Open Space and Parking Garage 
financing. As detailed hi the Cooperation and Tax Increment Reimbursement 
Agreement, the Agency agrees to the following; 

1 . Create a segregated account to hold all funds generated by the Parking Garage 
and keep a separate record of all financial transactions associated with said 
facility. 

2. Accompanying each reimbursement, the Agency will provide a report that lists 
the revenues, expenses, and net income of the Parking Garage and any unpaid 
obligation owed to the City. 

3. The Agency will consult with the City Controller's Office to determine the tax 
increment reimbursement amount. 

4. The Agency agrees to allow the City to examine all records and books related to 
the Parking Garage and associated financing and to have audits conducted by 
independent certified public accountants. 



112a 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

Items 12 and 13 - Files 02-1916 and 02-1893 



Department: 
Items: 



Description: 



Public Utilities Commission (SFPUC) 

File 02-1916: Resolution approving a Power Purchase 
Agreement between the San Francisco Public Utilities 
Commission (SFPUC) and the California Department of 
Water Resources (CDWR). 

File 02-1893: Ordinance authorizing settlement of a 
lawsuit filed by the City and County of San Francisco, on 
behalf of the People of California, against the Williams 
Energy Companies; the lawsuit entitled People v. Dynegy, 
et al. was filed on January 18, 2001, and has been 
consolidated as Wholesale Electricity Antitrust Cases I & 
II in the United States District Court, Southern District 
of California, Case Nos. 02 CV 0990-RHW, CV 02-1000- 
RHW, 02 CV-1001 RHW. The settlement provides (a) a 
modification of the long-term contracts between the State 
of California and Williams, (b) transfers to the City and 
County of San Francisco four electric generating turbines 
for use within the City, (c) payment by Williams to the 
State of California of approximately $19 million to assist 
with the siting and the development of electricity 
generating equipment in San Francisco and San Diego; 
and payment by Williams to the City and County of San 
Francisco of $500,000 for attorney's fees and other 
expenses of litigation. 

File 02-1893: The proposed ordinance would authorize 
the City's participation in a settlement negotiated by the 
State of California with Williams Energy Companies 
(Williams), which is one defendant in the City's ongoing 
lawsuit against electric energy generators and sellers for 
price gouging and market manipulation. On January 18, 
2001, the City Attorney's Office filed a lawsuit, entitled 
People v. Dynegy, et al. alleging unfair business practices, 
against 12 energy generators and sellers, including 
Williams. The City's lawsuit alleges that the unlawful 
conduct of the defendants caused or contributed to price 
spikes in the wholesale electricity market and shortages 
of electricity beginning in June of 2000. Other plaintiffs, 
including public entities, private citizens, and the 
California Lieutenant Governor filed similar lawsuits 
against electric energy generators and sellers in 2001. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

113 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



The City of Oakland and the Counties of Santa Clara and 
Alameda later joined the suit with the City and County of 
San Francisco and other public entities and private 
citizens. All of the cases were coordinated by the 
California Superior Court as the Wholesale Electricity 
Antitrust Cases I & II. Attachment I, provided by the City 
Attorney's Office, contains a list of San Francisco's co- 
plaintiffs. A list provided by the City Attorney's Office of 
all 12 defendant companies is shown in Attachment II. 

On March 11, 2002, the California Attorney General filed 
a lawsuit seeking $150 million in damages against four 
energy sellers and generators, including Williams. The 
State has now reached a settlement with Williams that 
would resolve all of its outstanding litigation against 
Williams related to electric price gouging and market 
manipulation, and any future claims concerning the 
fairness of the State's renegotiated long-term energy 
contracts with Williams. On November 7, 2002, the 
California Public Utilities Commission (CPUC) approved 
the proposed settlement. Other State entities, including 
the State's Electricity Oversight Board, the California 
Department of Water Resources (DWR), and the Attorney 
General approved the settlement on November 11, 2002. 
According to Ms. Theresa Mueller of the City Attorney's 
Office, the State expects that the private plaintiffs in the 
Wholesale Electricity Antitrust Cases and other public 
entities, including the City and County of San Francisco 
and its co-plaintiffs, will approve the settlement 
agreement as well. 

The settlement with Williams includes restructuring the 
State's long-term gas and electric contracts with 
Williams, which will reduce the cost to California 
ratepayers of such contracts by an estimated total of $180 
million according to the Attorney General's Office. 
Therefore, Ms. Muller advises that the State believes tbe 
renegotiated contracts for gas and electricity will result in 
savings in the cost of such gas and electricity for San 
Francisco residents and businesses because Pacific, Gas & 
Electric and other energy distributors sell energy to 
ratepayers at the pass-through rate of the long-term 
contracts. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

114 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Williams is also to pay the State $147 million in cash over 
seven years, beginning in 2003, and will also transfer to 
the State six natural gas turbines (turbines) for 
generating electricity, each capable of generating 50 
megawatts 1 of electricity. In addition to the reduced 
contract costs of $180 million and $147 million in cash 
payments to the State of California, the settlement 
agreement provides that Williams will pay $15 million 
into a litigation fund managed by the State which will be 
used to continue the prosecution of other generators in 
the Wholesale Electricity Antitrust Cases I & II, 
including the City's case. Therefore, under the settlement 
agreement, Williams will pay a total of $162 million to 
the State. Also, as stated above, the State's contract costs 
with Williams would be reduced by $180 million. 
Further, under the settlement, Williams has agreed to 
cooperate with the State in the investigation and 
prosecution of other generators. 

Under the settlement, the City will receive four of the six 
turbines transferred to the State by Williams. The City of 
San Diego will receive the other two turbines. The State 
has allocated $19 million, of the $147 million that 
Williams will pay the State, to fund the siting and 
development of electric generating faculties utilizing the 
six turbines in San Francisco and San Diego. According 
to Mr. Randolph Wu of the City Attorney's office, the final 
allocation of the $19 million to be received by San 
Francisco has not been determined. However, Mr. Wu 
advises that the City expects to receive two-thirds of the 
$19 million or approximately $12.66 million, with the 
balance of approximately $6.34 million to be paid to San 
Diego, based on San Francisco receiving four, or two- 
thirds, of the six turbines. The $19 million to be allocated 
to the Cities of San Francisco and San Diego will be held 
by the State in an escrow account and will be remitted to 
the Cities for reimbursement of all approved siting and 
development costs. The City will have until December 31, 
2003 to secure a site for the four turbines. If the City 
does not secure a site by December 31, 2003, the 
California Consumer Power and Conservation Financing 
Authority (Authority) may exercise an option to take over 



1 A megawatt of electricity is equal to 1,000 kilowatts and is sufficient to provide electric power to 
10,000 single-family residences. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

115 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



the four turbines, which were to have been transferred to 
San Francisco. The Authority would pay the City $2.5 
million for each turbine if the Authority elects to take 
over the turbines. According to Mr. Wu, the Authority 
would then be able to site and use the turbines to 
generate electricity as the Authority determines. The 
City would no longer have title to the turbines and no 
control over how the electricity generated by the turbines 
would be used. 

File 02-1916: Approval of the subject resolution would 
authorize the General Manager of the Public Utilities 
Commission, on behalf of the City, to execute the Power 
Purchase Agreement (the Agreement) between the 
SFPUC and the CDWR which would authorize the City to 
sell the capacity to generate electrical power to the 
California Department of Water Resources (CDWR), 
contingent on the adoption of a settlement agreement 
between the State of California and Williams and the 
transfer of the four turbines capable of generating up to 
200 megawatts of electricity (50 mega-watts per turbine) 
to the City. 

The proposed resolution states that San Francisco has not 
determined (a) whether it should site and develop the four 
50 megawatt capacity turbines in San Francisco or 
elsewhere, and (b) what the costs and the environmental 
impacts are of siting and developing the turbines. The 
proposed resolution further states that until the City and 
the CDWR perform additional analysis, the City cannot 
determine the amount payable to the City from the 
CDWR for the capacity to generate electrical power under 
the terms of the Agreement. The proposed resolution 
states that the authority for the CDWR to enter into the 
subject Agreement with the SFPUC on behalf of the City 
expires on December 31, 2002 (see Comment No. 5). 

The proposed Agreement, between the SFPUC and the 
CDWR contains the following provisions: 

Operation Date and Payment 

The CDWR would make payments for the capacity of 
electric generation on a monthly basis to the City after an 
electric generation facility, using any of the four turbines, 
achieves commercial operation (the "Commercial 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

116 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

Operation Date"). The Commercial Operation Date is 
defined as the date that the CDWR accepts the City's 
certification that all the requirements of operation have 
been achieved, including that (a) the City secures all 
permits governing safety and air and water emissions 
required to operate the turbines, (b) the completion of a 
performance test that measures the capacity and 
efficiency 2 of each turbine, and (c) the ability to collect 
data and perform future capacity and efficiency tests. 3 

The monthly payments, payable to the City by the 
CDWR, would include five components: 1) the fixed 
operation and maintenance costs (the FOM), 2) a debt 
service payment (the DS) 4 , 3) the costs of any property 
leased for the turbines (the RPLC), 4) the variable 
operation and maintenance costs (the Variable O&M), 
and 5) a reimbursement for the monthly fuel costs (the 
Fuel Payment). Attachment III, provided by Mr. Edward 
Smeloff of the PUC, explains the benefits of the Power 
Purchase Agreement to the City, including the proposed 
payment structure. 

Capacity Payment The first three components described above, the FOM, DS 

and RPLC, constitute the "Capacity Payment" which 
would be adjusted according to the rated capacity of the 
turbines (see Comment No. 8). Attachment III to this 
report, provided by Mr. Smeloff, further describes the 
Capacity Payment. The subject Agreement sets winter 
and summer targets such that if the turbines are 
available to produce energy more than 97% of the hours 
or 94% of the hours in the winter season, the City would 
receive a bonus payment on a monthly basis from the 
CDWR, based on the ability of the turbines to produce 
energy above the target levels. However, if the turbines 
are not available to produce energy for at least 95% of the 
hours in the summer season or 92% of the hours in the 
winter season, the City would receive a reduced monthly 
Capacity Payment from the CDWR. These targets do not 



2 The efficiency of each unit would be measured by the "heat rate" which is the amount of fuel 

required to produce a unit of energy. 

3 The subject Agreement requires that the City perform at least one annual test and up to three tests 

annually on the turbines, using installed instrumentation calibrated by the CDWR to determine the 

maximum maga-watt output of the turbines. 

4 The debt service payment would amortize over a 10 year period, the capital costs of the electric 

generating facility utilizing any of the four turbines. 

BOARD OF SUPERVISORS 
BUDGE^ANALYST 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

include scheduled maintenance under the subject 
Agreement. Attachment I to this report, provided by Mr. 
Wu, explains in more detail how the Capacity Payments 
would change if the turbines failed to meet the 
availability targets. The actual monthly Capacity 
Payment cannot be determined until the costs of siting, 
developing and operating the turbines are known. 

Other Payments The Variable O&M and Fuel Payments are payments 

which the CDWR would pay the City to cover the variable 
costs of producing and delivering energy to the 
transmission grid according to the CDWR's schedule of 
energy delivery 5 . The Agreement would establish that 
should the City choose to generate energy in addition to 
the CDWR's schedule, any associated fuel costs would be 
the responsibility of the City. The Fuel Payment, payable 
to the City from the CDWR, would only cover the total 
cost of fuel if the City operates and maintains the electric 
generating facility at the guaranteed efficiency or heat 
rate. 

The subject Agreement states that the FOM and the 
Variable O&M payments would not include (a) expenses 
incurred by the City from any litigation or action brought 
against the City regarding the siting, development or 
operation of the turbines, or (b) the costs of obtaining and 
complying with required permits for the turbines. 
However, according to Mr. Wu, the City may recover all of 
these costs through the debt service (DS) component or 
other payments. 

Terms and Termination Options 

The term of the Agreement would be ten years from the 
Commercial Operation date. The City would have an 
option to terminate the Agreement five years from the 
date of execution of the subject Agreement. In order to 
exercise the five-year termination option, the City must 
inform the CDWR of its intention to terminate the 
Agreement one-year prior to termination. The City may 
also terminate the Agreement at any time prior to the 
Commercial Operation date if it determines that the cost 



6 The subject Agreement gives the CDWR the right to schedule the delivery of energy from the four 
turbines to the transmission grid, which is the State's system for transporting electricity. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

118 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 

of the facility is too high or that regulatory approvals or 
other permits may not be obtained. 

The CDWR may terminate the Agreement at any time 
prior to the sale by the City of bonds (see Comment No. 4) 
to finance the project to build a facility to operate the 
turbines or at any time after the CDWR has paid the City 
all DS payments due to the City. The Agreement states 
the CDWR may terminate the Agreement if the cost of 
siting and financing the turbines "is or will become 
unacceptable" to the State prior to the initial sale of the 
bonds. The CDWR may also terminate the agreement if 
the City has not secured a site for the construction of an 
electric generating facility by December 31, 2003. 

Comments: 1. Ms. Mueller advises that the City has continuing 

litigation against the remaining 11 energy generators and 
sellers (excluding Williams), originally included in the 
City's lawsuit, as listed in Attachment II. 

2. Williams purchased the four turbines to be transferred 
to San Francisco from General Electric at a price of $15 
million per turbine, for a total cost of $60 million for the 
four turbines. As stated previously, if the City does not 
secure the site for an electric generating facility utilizing 
the four turbines by December 31, 2003, the California 
Consumer Power and Conservation Financing Authority 
may exercise an option to take over the turbines from the 
City and will pay the City $2.5 million for each turbine, or 
a total of $10 million, when the Authority elects to take 
over the turbines. 

3. As stated previously, the State has allocated $19 
million to fund the siting and development of six turbines 
by San Francisco and San Diego. While the City 
Attorney's Office estimates that the City will receive two 
thirds of this $19 million, or an estimated $12.66 million, 
there has not been a precise determination of what 
portion of the $19 million San Francisco will receive. Mr. 
Smeloff of the PUC reports that the PUC does not have 
estimates for the cost of siting and developing an electric 
generating facility utilizing the four turbines. Mr. Smeloff 
further reports that, as of the writing of this report, the 
PUC has not determined where the turbines would be 
located. However, Mr. Smeloff states that the SFPUC 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

119 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



will participate in a process to identify an appropriate 
location(s) in San Francisco for the siting of the turbines 
and narrow the list of locations to a preferred site after 
conducting a review of the attributes of the alternative 
locations. 

4. Ms. Monique Mover of the Mayor's Office of Public 
Finance advises that financing the capital cost of the 
electric generating facility utilizing the four turbines 
could be conducted through Revenue Bonds or Certificates 
of Participation. Ms. Moyer reports that because the 
precise estimated costs for siting and developing the 
electric generating facility utilizing the four turbines are 
not known and the scope of the project has not been 
finalized, Ms. Moyer is unable to report on the best 
method of financing at this time. Costs for siting and 
developing the electric generating facility utilizing the 
four turbines that are not paid out of the $19 million fund 
may be included as a capital cost of the project and 
financed through bonds or certificates. Ms. Moyer advises 
that the debt will have a ten-year amortization period 
such that the capital costs will be paid off in the first ten 
years. Ms. Moyer further reports that the City, the PUC 
or the CDWR could issue the needed financing 
instruments. Ms. Moyer states that the structure of the 
proposed Power Purchase Agreement provides that the 
CDWR would pay for all financing costs through the 
capacity payment. 

5. According to Mr. Wu, the State gives the CDWR 
authority under the Emergency Powers Act in February of 
2001 to purchase power from power producers for 
consumers when major utilities (Pacific Gas and Electric 
and Southern California Edison) do not have the 
creditworthiness to do so. The authority of the CDWR to 
make such power purchases expires on December 31, 
2002, according to Mr. Wu. 

6. Mr. Smeloff states that the objective of the proposed 
Power Purchase Agreement is to enhance the reliability of 
electricity in San Francisco, especially in emergencies. 
According to Mr. Smeloff, the four 50 megawatt turbine 
units are intended to supply electric power for 30 percent 
to 40 percent of the annual hours that a traditional power 
plant would operate. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

120 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



7. While the subject proposed resolution states that 
siting and developing an electric generating facility 
utilizing the four turbines would enable the closure of the 
power plant, the Budget Analyst notes that nothing in the 
Agreement requires that PG&E's power plant at Hunters 
Point be closed. According to Ms. Mueller, the City has 
an agreement with PG&E, previously approved by the 
Board of Supervisors (File No. 98-1256), which requires 
that the power plant at Hunters Point be shut down when 
it is no longer needed for reliability, a determination that 
will be made by the California Independent System 
Operator. Attachment III to this report describes how the 
proposed Power Purchase Agreement may lead to the 
closure of the power plant at Hunters Point. 

8. According to Mr. Wu, the Capacity Payment structure 
was developed in negotiations between the City and the 
CDWR to reimburse the City for the cost of siting and 
developing the turbines over ten years. Mr. Wu advises 
that after the 10-year period, the turbines, which have an 
estimated life of 30 years, would be owned by the City. As 
explained in Attachment I, Mr. Wu states that the initial 
value of a 200 MW electric generating facility is $160 
million. 

The Budget Analyst notes that if and only if the City is 
able to site, develop, construct, achieve commercial 
operation and then operate and maintain the electric 
generating facility for ten years under the terms of the 
Agreement, then the City would be reimbursed by the 
CDWR in full for the capital costs of the electric 
generating facility utilizing the turbines. How much the 
City could potentially not be reimbursed would depend on 
the costs of developing and siting the turbines. According 
to Mr. Smeloff, an estimate of such costs cannot be 
determined until additional work on siting and 
development has been performed. However, the City 
would also receive a portion of the $19 million included in 
the Settlement Agreement to assist in the siting and 
development of the turbines. 

9. Additionally, under the subject Agreement, the City 
would be responsible for paying the costs of any litigation 
or administration actions that arise from the siting, 
development or operation of the turbines. Mr. Wu reports 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

i2r 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



that the costs associated with litigation cannot be 
estimated at this time. However, Mr. Wu states that 
these costs may be recovered from the debt service 
payments and other payments under the Agreement. As 
stated previously, the debt service payments, are included 
in the capacity payments to be paid by the CDWR to the 
City for the capacity to generate electrical power. In 
Attachment III, Mr. Smeloff describes the process to site 
four 50-megawatt peaker units and states that "the costs 
of the project cannot be estimated until additional work 
on siting and development has been performed." 

10. As noted above, the Capacity Payment, payable to 
the City from the CDWR, would be reduced if the electric 
generating facility utilizing the turbines does not meet 
the availability targets, as explained in Attachment I. 
Similarly, the Fuel Payments paid to the City would be 
reduced by the CDWR if the electric generating facility 
utihzing the turbines does not meet the fuel efficiency 
standard that the Agreement establishes, as explained in 
Attachment I. According to Mr. Wu, in order to minimize 
the risk to the City of any reductions in payments made 
by the CDWR, the City plans to purchase insurance and 
warranties against the risk of not meeting the proposed 
Power Purchase Agreement standards to guarantee that 
the City would recover its full costs. Mr. Wu reports that 
the cost to the SFPUC of such insurance and warranties 
is not known at this time. 

11. In Attachment I, Mr. Wu explains that additional 
approvals by the Board of Supervisors will be required for 
land, construction and operations contracts related to the 
project and for the financing necessary for the project. 

12. As of the writing of this report no details are 
available on the cost of transporting, storing, siting, 
developing, insuring and operating the four turbines to be 
transferred by the State to the City under the propos d 
Settlement Agreement and to be operated under the 
proposed Power Purchase Agreement. Additionally, the 
City has not determined whether siting the turbines is 
feasible and has not identified a site. 

As stated above in Comments Nos. 8 and 9, the Budget 
Analyst has identified two risk factors: (1) if and only if 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

122 



Memo to Finance Committee 

December 4, 2002 Finance Committee Meeting 



Recommendation: 



the City is able to site, develop, construct, achieve 
commercial operation and then operate and maintain the 
electric generating facility for ten years under the terms 
of the Agreement, then the City would be reimbursed by 
the CDWR in full for the capital costs of the electric 
generating facility utilizing the turbines and how much 
the City could potentially not be reimbursed would 
depend on the costs of developing and siting the turbines, 
and (2) under the subject Agreement, the City would be 
responsible for paying the costs of any litigation or 
administration actions that arise from the siting, 
development or operation of the turbines . The estimated 
dollar value of these risk factors cannot be determined, as 
previously stated. Therefore, the Budget Analyst 
considers approval of the subject ordinance and resolution 
to be policy matters for the Board of Supervisors. 

Approval of the proposed ordinance (File 02-1893) and 
resolution (File 02-1916) is a policy matter for the Board 
of Supervisors. 



/ ; 



cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 



/ 

Harvey M. Rose 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



City and County of San Francisco 



Dennis J. Herrera 
City Attorney 




Attachment! 

Office of ?AifciTY ATT 3 ORNEY 

THERESA L. MUELLER 
Deputy City Attorney 

Direct Dial: (415) 554-4640 
E-Mail: THERESA_MUELLER@sfgov.org 



MEMORANDUM 

TO: ELAINE FORBES 

Budget Analyst's Office 
Board of Supervisors 

FROM: THERESA L. MUELLER 

RANDOLPH L. WU 
Deputy City Attorneys 

DATE: November 27, 2002 

RE: Re: Budget Analysis Proposed Power Purchase Agreement between the 

Department of Water Resources and the City and County of San Francisco 
("Power Purchase Agreement") 



Per your request we are providing additional information on the settlement, the electric 
generating project and terms in the Power Purchase Agreement. 

Co-plaintiffs 

The plaintiffs in San Francisco's lawsuit are San Francisco, Oakland, and the Counties of 
Santa Clara and Contra Costa. Our case was coordinated into the Wholesale Electricity Antitrust 
Cases with the following additional plaintiffs: Lieutenant Governor Cruz Bustamante, 
Assemblywoman Barbara Mathews, Valley Center Municipal Water District, Padre Dam 
Municipal Water District, Ramona Municipal Water District, Helix Water District, Vista 
Irrigation District, Yuima Municipal Water District, Fallbrook Public Utility District, Borrego 
Water District, Sweetwater Authority, Metropolitan Transit Development Board; San Diego 
Trolley, Inc.; San Diego Transit Corporation; classes consisting of all persons or entities in 
California who indirectly purchased Electric Power for purposes other than resale or distribution 
since January 1, 1998, represented by Pamela R. Gordon, Ruth Hendricks, Mary L. Davis and 
Oscar's Photo Lab; the Attorneys General of Washington and Oregon. 

Required Board Approvals 

Under Charter Section 9. 1 18(b), agreements in excess of ten years or requiring expenditures of 
$10 million or more require approval of the Board of Supervisors. Development of the project 
would necessitate one or more contracts that would fall into this category. Such contracts could 
include contracts for engineering, procurement, construction, operations, maintenance, and 
financing. In addition, development of the project might involve a lease that would require 
approval under 9. 1 1 8(c). 



City Hall ■ 



Dr. Carlton B. Goodlett Place, Room 250 • San Francisco, California 941 02-091 7 
Reception: (415)554-4700 -Facsimile: (415)554-4763 



v\pucw\snofed\fwu\bgtcmcrvdoc 



Attachment I 
Page 2 of 3 

City and County of San Francisco Office of the City Attorney 

Memorandum 
TO: ELAINE FORBES 

DATE: November 27, 2002 

PAGE: 2 

RE: Re: Budget Analysis Proposed Power Purchase Agreement between the 

Department of Water Resources and the City and County of San Francisco 

("Power Purchase Agreement") 



Initial Valuation of Electric Generating Facility 

The California Energy Commission (CEC) issued in December, 1998 a Market Clearing Price 
Forecast that included as Appendix F the Cost of New Entrants in the California energy market. 
In that forecast the CEC staff refers to an installed cost for combined cycle plants as being in the 
range of $800/kw. The forecast also refers to a Stone & Webster report showing total project 
costs for independent power projects as within a range of $834 to $1,981 per kw (1998 dollars). 
These forecasts of installed costs on a $/kw basis use averages of reported costs in less densely 
populated areas along with installed costs in more densely populated urban areas such as San 
Francisco where the costs of building generation are likely to be significantly higher than in 
other areas. 

The proposed installation of four gas turbines in San Francisco with a total rated capacity of 200 
MWs then may be valued at $160 million based upon a conservative installed cost of $800/kw. 

Debt Service Payment 

The proposed Power Purchase Agreement provides for the recovery of the cost of the electric 
generating facility ("Facility") as determined by the fixed Engineering, Procurement and 
Construction Contract price and any development costs through bonds to be issued by San 
Francisco. The actual debt service on the bonds or other indebtedness issued to finance the 
Facility plus other amounts such as a debt service reserve are to be recovered through the Debt 
Service (DS) component of the Capacity Payment under the Power Purchase Agreement. The 
Capacity Payment is to be paid monthly whether or not energy is delivered from the Facility on 
the basis of the Facility's Rated Capacity and its availability as explained below. 

Availability Targets 

The Power Purchase Agreement has certain performance guarantees such as an Availability 
Guaranty. Under the Availability Guaranty, the Facility must be capable of generating electricity 
for a minimum number of hours each month after scheduled hours for maintenance of the 
Facility are excluded. During the summer months, the Facility must achieve a 95% availability 
and during the winter months the Facility must achieve a 92% availability. If the Facility falls 
below these targets, then the Capacity Payment is adjusted downward to penalize the City for not 
meeting the expected Availability Guaranty. If the Facility achieves a 97% availability during 
the summer or a 94% availability during the winter, then the Capacity Payment will be increased 
to reward the City for exceeding the Availability Guaranty. If performance during the summer is 



12 5 N \PUCW\SHARED\RWU\BGTATTCH DOC 



Attachment I 

City and County of San Francisco Office of^he City Attorney 

Memorandum 

TO: ELAINE FORBES 

DATE: November 27, 2002 

PAGE: 3 

RE: Re: Budget Analysis Proposed Power Purchase Agreement between the 

Department of Water Resources and the City and County of San Francisco 

("Power Purchase Agreement") 



between 95-97% or 92-94% in the winter, then no adjustment of the Capacity Payment will be 
made. 

This formula with a penalty for lower availability and a bonus for greater availability around a 
performance "deadband" is commonly used to give economic incentives to the operator to ensure 
that the Facility will be available and capable of generating electricity. 

Availability guarantees are included in warranties from the manufacturer and also are provided 
within the O&M Contract. The City should expect to mitigate its risk through the warranties and 
performance guarantees provided by the manufacturer and the O&M contractor. 

Heat Rate Guaranty 

The Power Purchase Agreement also has a heat rate or efficiency guaranty. The Test Heat Rate 
of the Facility as measured by the amount of fuel required to generate a kilowatt of electricity 
(btu/kwh) will be determined annually through a Performance Test. The adopted Test Heat Rate 
then will be used for the following year until another Performance Test is conducted and another 
heat rate is determined. 

To the extent the Facility in a given year does not operate at the adopted Test Heat Rate and 
consumes more fuel than is expected to generate electricity, the City would bear the cost of the 
additional fuel required to generate electricity. 

Heat rate guarantees are generally included in warranties from the manufacturer and also may be 
included in performance guarantees within the O&M Contract. The City should expect to 
mitigate its own risk though performance guarantees provided by the manufacturer 



126 



N \PUCW\SHAR£D\SW\J\BGTA1TCHOOC 



City and C ounty of San Francisco 



Dennis J. Herrera 
City Attorney 




Attachment II 

Office of the City Attorney 
theresa mueller 

Deputy City Attorney 

Direct Dial: (415)554-4640 

E-MAILTHERESA_MUELLER@SfgOV.Org 

November 26, 2002 



1 . Dynegy Power Marketing Inc., Houston, TX 

2. Enron Energy Services Inc., Houston, TX 

3. Enron Power Marketing Inc., Houston, TX 

4. PG&E Energy Trading Holding Corp., Houston, TX 

5. Reliant Energy Services Inc., Houston, TX 

6. Sempra Energy Trading Corp., Stamford, CT 

7. Sempra Energy Resources, San Diego, CA 

8. Southern Company Energy Marketing, Atlanta, GA 

9. Williams Energy Marketing and Trading Co., Tulsa, OK 

10. Duke Energy Trading and Marketing, a Delaware corporation 

11. Morgan Stanley Capital Group Inc., NY 

12. NRG Energy Inc., Minneapolis, MN 



City Hall -1 Dr. Carlton B. Goodlett Place, Room 234- San Francisco, California 941 02-09 17 
Reception: (415) 554-4700' Facsimile: (415)554-4763 

g:\uierc\sgraham\ltems\finance\defendantlis1.doc 
g\usen\iO''ohom\itemi\finance\delendant Bit. doc 



127 



-NOU-25-2002 17=48 SFPUC 415 554 0796 P. 01 

Attachment 1 1 1 
Page 1 of 3 






To: Sarah Graham 
Budget Office 
Board of Supervisors 

From: Ed Smeloff 

Assistant General Manager 

San Francisco Public Utilities Commission 

Re: Proposed Power Purchase Agreement between the Department of Water Resources 
and the City and County of San Francisco 

Benefits of the Power Purchase Agreement 

The purpose of the proposed agreement between the California Department of Water 
Resources (CDWR) and the City and County of San Francisco (CCSF) is to facilitate the 
siting of four natural-gas fired General Electric LM 6000 combustion turbines generators 
(gas turbines), each with a nominal rating of between 45 and 50 MW. (The capacity 
rating for the purposes of the proposed agreement will be determined through a 
performance test upon achieving commercial operation,) 

The siting of the combustion turbines will achieve the near-term goal of reducing reliance 
on inefficient and unreliable electric generation at the Potrero and Hunters Point Power 
Plants while becoming an integral component of a long-term, competitively priced 
solution to establishing reliability for the regional electric system for the future. The 
siting of these gas turbines coupled with specific transmission line projects, energy 
efficiency programs and distributed power initiatives will provide the San Francisco 
Peninsula with the long-term reliability necessary to permanently shutdown existing 
generation at Hunters Point and significantly decrease reliance on the older and heavily 
polluting power units at the Potrero Power Plant. 

The staff of the San Francisco Public Utilities Commission has been working in a 
collaborative process with the California Independent System Operator, Pacific Gas and 
Electric Co. and community organizations to specifically define the conditions that would 
result in the permanent closure of the Hunters Point power plant. Those collaborative 
discussions have resulted in an assessment that without the Hunters Point unit 4 power 
plant (163 MW in size) that the reliable load-serving capability of the electrical system 
for San Francisco is 850 megawatts. 

This collaborative group has also modeled a scenario under which three gas turbines are 
sited in San Francisco, a 57 MW combined cycle plant (using one gas turbine) is sited at 
San Francisco airport, an existing transmission line from San Mateo to San Francisco is 
upgraded from 60 KV to 1 15 KV and a 1 15 KV underground cable is extended between 
the Potrero electrical switchyard and the Hunters Point electrical switchyard. Under Q is 
scenario the reliable load-serving capability for San Francisco would be 1090 megawatts. 



128 



NQCH25-2002 17=48 SFPUC 415 554 079S P.0, 

Attachment III 
Page 2 of 3 

The highest load experienced in San Francisco occurred in 2000 at 940 megawatts. 
PG&E's most recent load forecast predicts load to grow to 967 megawatts by 2005 and 
1077 megawatts by 2012. Based on this forecast it is very unlikely that the California ISO 
would permit the closure of the Hunters Point power plant without significant new 
electrical generation, The gas turbines would be the quickest source of significant new 
generation that could sited in San Francisco. 

In addition to facilitating the closure of the Hunters Point power plant the four gas 
turbines provide additional reliability and environmental benefits for San Francisco. The 
gas turbines are efficient (heat rate of 10,000 BTUs/KWh) environmentally friendly (0.19 
lbs. of oxides of nitrogen/MWh) and operationally flexible (10 minute start-up time). On 
each of these parameters the gas turbines are superior to the existing facilities at the 
Potrero power plant. The larger Potrero unit 3 (207 megawatts) is less efficient (heat 
rate of 1 1,000 BTUS/KWh), more polluting (0,60 lbs of oxides of nitrogen/MWh) and 
slow to ramp up to full power (~ 24 hours from cold start). In addition, the gas turbines 
are more reliable as brand new facilities compared to a 37 year old thermal power plant 
that is forced out of operation approximately once every 2000 hours. Given their 
operational flexibility and efficiency these plants would be dispatched ahead of Potrero 
unit 3, thereby significantly reducing local air pollution. 

Gas turbines like those provided in the Williams settlement are used in both simple cycle 
and combined cycle applications. They can operate reliably for more than 8000 hours 
per year (more than a 90 percent capacity factor). Typically, the GE LM6000 gas 
turbine requires a major overhaul every 40,000 hours. If the gas turbines were expected 
to operate for many years at high capacity factors (greater than -30 percent) it would be 
efficient to add a heat recovery steam generator and a steam turbine to make the facility a 
combined cycle power plant. 

It is possible to expand a simple cycle facility to a combined cycle power plant at a later 
date. However, operation as a combined cycle power plant could increase local air 
pollution if the number of hours the plant is used were to increase significantly for 
economic dispatch. It is anticipated that as a simple cycle power plant the gas turbines 
would only be used the number of hours they are needed for reliability purposes. 

Proposed Payment Structure 

The proposed payment structure of the power purchase agreement can be characterized as 
a cost of service payment structure. Under this structure the City would be reimbursed 
for the following costs associated with owning and operating a power plant: 1) debt 
service for construction of the power plant, 2) property costs, 3) fixed operation and 
maintenance costs (principally labor), 4) variable operation and maintenance costs, and 5) 
fuel costs. 

The debt service for the power plant would be included into a monthly capacity payment 
from CDWR to CCSF. Such payments would be based on the rated capacity of the plant 
and the debt service payable on the debt and any other amounts required for reserves 



129 



•NOU-25-2002 17: 48 SFPIJC 415 554 0796 P. 0.3 

Attachment 1 1 1 
Page 3 of 3 

under a bond indenture. The capacity payment would be made to CCSF regardless of 
whether the plant is operated in any given month as long as it is available for operation. 
This type of payment structure provides a high level of certainty that CCSF will recover 
the cost of developing the power plant. That degree of certainty will enable CCSF to 
finance the power plant on reasonable terms. 

The payments for fixed and variable operation and maintenance costs will be linked to a 
management agreement with a qualified power plant operator plus amounts for insurance, 
capital improvements and CCSF administrative costs. 

Process and Costs for Siting and Developing a Power Plant 

Siting and developing a power plant utilizing the four combustion turbines will require 
the following steps: 1) identification of appropriate candidate sites, 2) review of the 
attributes of alternative sites and selection of a preferred site, 3) obtaining site control 
through a long-term lease or property purchase, 4) issuance of a competitive solicitation 
for an engineering, procurement and construction (EPC) contractor, 5) selection of an 
EPC contractor including appropriate city approvals, 6) preparation of an application for 
certification (AFC) to the California Energy Commission (CEC), 7) determination that 
the AFC is data adequate by CEC Executive Director, 8) obtain local, state and federal 
regulatory determinations related to air, water and land impacts, 9) complete gas and 
electrical interconnection studies, 10) CEC evidentiary hearings 1 1) CEC decision on 
permits, 12) execution of engineering, procurement and construction contract, 13) 
construction of power plant, 14) execute an operations and maintenance contract , 15) 
start-up and test and 16) commercial operation. Through the EPC and O&M contracts, 
much of the performance risk to the City could be minimized. 

The costs of the project cannot be estimated until additional work on siting and 
development has been performed. 



130 



City and County of San Francisco city Han 

J J 1 Dr. Carlton B. 

Meeting Minutes Goodiettpiace 

San Francisco, CA 

Finance Committee 94102-4689 

Members: Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 

Clerk: GailJohnson 

Wednesday, December 11, 2002 12:30 PM City Hall, Room 263 

Regular Meeting 

Members Present: Aaron Peskin, Chris Daly. 
Members Absent: Sophie Maxwell. 



MEETING CONVENED 



The meeting convened at 12:38 p.m. 



City and County of San Francisco I Printed at 2:4~ I'M on 3/5/04 



Finance Committee Meeting Minutes December 11, 2002 

020549 [Special Use District to allow an approved live/work project convert to residential] 
Supervisor Daly 

Ordinance amending the San Francisco Planning Code by adding Section 249.23 to create the Fourth and 
Freelon Streets Special Use District encompassing the property zoned Service Light Industrial and bounded by 
Fourth Street, Freelon Street, Zoe Street and Welsh Street and by adding Section 263.16 to create special 
height and bulk exceptions for the Fourth and Freelon Streets Special Use District, which would allow 
previously approved but unbuilt live/work units to convert to market-rate residential units and additional 
market-rate residential units to be constructed with an allowable increase in height from 50' to 85' and a 
dwelling unit density governed by the permissible building envelope; provided that (i) the developer shall 
construct at the developer's sole expense, on land owned or purchased by the developer in either the South of 
Market Area or the North of Market Residential Special Use District, off-site affordable rental housing with 
square footage equal to 15% of the total residential units to be constructed offset by the cost of land 
acquisition, with a minimum of 56 units constructed of no less than 400 square feet each, (ii) the units shall be 
rental units affordable to low-and lower income households with income not exceeding 40% of San Francisco's 
median income, which shall remain affordable for 55 years or for the life of the building whichever is longer, 
and (iii) upon completion, the affordable housing development shall be owned, managed and operated by a 
nonprofit housing organization with reversion to the City if the nonprofit housing organization is dissolved. 

(Companion measure to File 020550; Final Environmental Impact Report, dated September 7, 2000) 

(12/9/02 in Board: Supervisor Daly submitted a substitute ordinance bearing new title.) 

(1/21/03 From Planning Department: Executive Summary hearing on January 9, 2003 with attachments; 

Addendum to Final EIR dated November 7, 2002.) 

4/8/02, ASSIGNED UNDER 30 DAY RULE to Transportation and Commerce Committee, expires on 5/8/2002. 4/12/02 - Transmitted to 

Planning Commission for public hearing and recommendation. 

8/9/02, TRANSFERRED to Finance Committee. 

1 1/14/02, RESPONSE RECEIVED. (From Planning Department, Addendum to Final Environmental Impact Report, dated November 7, 

2002) 

1 1/20/02, CONTINUED. Heard in Committee. Speakers: Sue Hestor; Theodore Lakey, Deputy City Attorney; Supervisor McGoldnck; 

Gabriel Metcalf, Deputy Director, SPUR and Housing Action Coalition; Antoinetta Stadlman; Randy Shaw, Tenderloin Housing Clinic; 

Joe O'Donohue; Alice Barkley, Attorney for Property Owner; Sam Dodge, Central City SRO Collaborative; Ernest Bush; Mark Ellinger, 

Central City SRO Collaborative; Oscar McKinney; Joanna Hagerty; Delphine Brody, Tenant Advocate, Mental Health Association; Otto 

Duffy, Tom Waddell Health Center Advisory Board; Orville Luster, Executive Director, Youth for Service; Thomas LeRoux, President of 

Board, Youth for Service; Samuel Devore, Metropolitan Fresh Start Drug Rehab. Project; Mary Rogers; Lucian Blazej, Strategic 

Solutions; Joe Cassidy, Project Sponsor; Manny Flores, Carpenters Union, Local 22; Charles Breidinger; Charles Moore. 

Continued to Special Meeting on Tuesday, November 26, 2002, at 3:00 p.m. 

1 1/26/02, CONTINUED. Heard in Committee. Speakers: Jean-Paul Samaha, Senior Policy Analyst and Liaison to Board of Supervisors, 

Planning Department; Paul Lord, Planning Department; Miriam Chion, Planning Department; Supervisor McGoldrick; Judith Boyajian, 

Deputy City Attorney; Joe Cassidy; Lucian Blazej; Randy Shaw; Alice Barkley; Robert Scott; Edward Kaplan, Kaplan Architects; Nathan 

Pahucki; Chris Slattery; David Lewis; Paul Homchick; Elizabeth Dodd; Theodore Lakey, Deputy City Attorney; Andy Sills; Jeff Gotelli; 

Michael Nulty, Tenant Associations Coalition; Weldon Jackson; Sam Dodge, Central City SRO Collaborative; Samuel Lagasca; Delphine 

Brody, Central City SRO Collaborative; Anna Pahucki; Randy Shaw, Tenderloin Housing Clinic; Anna Bolton-Arguello; Madeleine 

Heinser; Gen Fujioka, Asian Law Caucus; Angelene O'Loughlin; Anndo Davis; Calvin Welch; Sue Hestor; Male Speaker; Joe 

O'Donohue, Residential Builders; John Bardis. 

Continued to 12/11/02. 

12/9/02, ASSIGNED to Finance Committee. 

12/9/02, SUBSTITUTED. Supervisor Daly submitted a substitute ordnance bearing new title. 

12/10/02, REFERRED TO DEPARTMENT. Referred to Planning Commission for public hearing and recommendation. 

Heard in Committee. Speakers: Male Speaker; Judy Berkowitz; Chris Slattery; Christine Konkel; Male 

Speaker; Bruce Prescott; Male Speaker; Joe O'Donohue; Female Speaker; Haro Shakudo. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Peskin, Daly 

Absent: 1 - Maxwell 



City and County of San Francisco 2 Printed at 2:47 PM on 3/5/04 



Finance Committee Meeting Minutes December 11, 2002 



020550 [Zoning Map Amendment] 
Supervisor Daly 

Ordinance amending the San Francisco Planning Code by amending the Zoning Map of the City and County of 
San Francisco to change the use classification and the height and bulk designation of the property zoned 
Service Light Industrial and bounded by Fourth Street, Freelon Street, Zoe Street and Welsh Street. 

(Final Environmental Impact Report, dated September 7, 2000) 

(12/9/02 in Board: Supervisor Daly submitted a substitute ordinance bearing same title.) 

4/8/02, ASSIGNED UNDER 30 DAY RULE to Transportation and Commerce Committee, expires on 5/8/2002. 4/12/02 - Transmitted to 

Planning Commission for public hearing and recommendation. 

8/9/02, TRANSFERRED to Finance Committee. 

1 1/14/02, RESPONSE RECEIVED. (From Planning Department, Addendum to Final Environmental Impact Report, dated November 7, 

2002) 

1 1/20/02, CONTINUED. Heard in Committee. Speakers: Sue Hestor; Theodore Lakey, Deputy City Attorney; Supervisor McGoldrick; 

Gabriel Metcalf, Deputy Director, SPUR and Housing Action Coalition; Antoinetta Stadlman; Randy Shaw, Tenderloin Housing Clinic; 

Joe O'Donohue; Alice Barkley, Attorney for Property Owner; Sam Dodge, Central City SRO Collaborative; Ernest Bush; Mark Ellinger, 

Central City SRO Collaborative; Oscar McKinney; Joanna Hagerty; Delphine Brody, Tenant Advocate, Mental Health Association; Otto 

Duffy, Tom Waddell Health Center Advisory Board; Orville Luster, Executive Director, Youth for Service; Thomas LeRoux, President of 

Board, Youth for Service; Samuel Devore, Metropolitan Fresh Start Drug Rehab. Project; Mary Rogers; Lucian Blazej, Strategic 

Solutions; Joe Cassidy, Project Sponsor; Manny Flores, Carpenters Union, Local 22; Charles Breidinger; Charles Moore. 

Continued to Special Meeting on Tuesday, November 26, 2002, at 3:00 p.m. 

1 1/26/02, CONTINUED. Heard in Committee. Speakers: Jean-Paul Samaha, Senior Policy Analyst and Liaison to Board of Supervisors, 

Planning Department; Paul Lord, Planning Department; Miriam Chion, Planning Department; Supervisor McGoldrick; Judith Boyajian, 

Deputy City Attorney; Joe Cassidy; Lucian Blazej; Randy Shaw; Alice Barkley; Robert Scott; Edward Kaplan, Kaplan Architects; Nathan 

Pahucki; Chris Slattery; David Lewis; Paul Homchick; Elizabeth Dodd; Theodore Lakey, Deputy City Attorney; Andy Sills; Jeff Gotelli; 

Michael Nulty, Tenant Associations Coalition; Weldon Jackson, Sam Dodge, Central City SRO Collaborative; Samuel Lagasca, Delphine 

Brody, Central City SRO Collaborative; Anna Pahucki; Randy Shaw, Tenderloin Housing Clinic; Anna Bolton-Arguello; Madeleine 

Heinser; Gen Fujioka, Asian Law Caucus; Angelene O'Loughlin; Anndo Davis; Calvin Welch; Sue Hestor; Male Speaker; Joe 

O'Donohue, Residential Builders; John Bardis. 

Continued to 12/11/02. 

12/9/02, SUBSTITUTED. Supervisor Daly submitted a substitute ordinance bearing same title. 

12/9/02, ASSIGNED to Finance Committee. 

12/10/02, REFERRED TO DEPARTMENT. Referred to Planning Commission for public hearing and recommendation. 

Heard in Committee. Speakers: Male Speaker; Judy Berkowitz; Chris Slattery; Christine Konkel; Male 
Speaker; Bnice Prescott; Male Speaker; Joe O'Donohue; Female Speaker; Haw Shakudo. 
CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Peskin, Daly 
Absent: 1 - Maxwell 



City and County of San Francisco 3 Printed at 2:4" PM on 3/5/04 



Finance Committee 



Meeting Minutes 



December 11,2002 



021752 [Reserved Funds, Department of Children, Youth and their Families] 

Hearing to request release of reserved funds, Department of Children, Youth and their Families, fiscal year 

2002-03 budget, in the amount of $700,000 to fund programs for the community-based organizations. (Mayor) 

10/31/02, RECEIVED AND ASSIGNED to Finance Committee. 

1 1/13/02, CONTINUED. Heard in Committee. Speakers: Brenda Lopez, Director, Department of Children, Youth and Their Families; 

Supervisor Sandoval; Margaret Brodkin, Director, Coleman Advocates for Children and Youth. 

Continued to 11/20/02. 

1 1/20/02, CONTINUED. Heard in Committee. Speakers; Brenda Lopez, Director, Department of Children, Youth and Their Families; 

Supervisor Sandoval. 

Continued to 12/4/02. 

12/4/02, CONTINUED. Speakers: None. 

Continued to 12/11/02. 

Heard in Committee. Speakers: Brenda Lopez, Director, Department of Children, Youth and Their Families; 
Supervisor Sandoval; Sharon Dolan, Executive Director, Health Initiatives for Youth; Sally Larkin, Friends of 
St. Francis Child Care Center; Donna Cahill, San Francisco Child Care Provider Association. 
Release of reserved funds in the amount of $700,000 approved. 
APPROVED AND FILED by the following vote: 

Ayes: 2 - Peskin, Daly 

Absent: 1 - Maxwell 



021324 [Airport Concession Lease] 

Resolution approving the Domestic Terminals Automated Teller Machine Lease A between Wells Fargo Bank, 
N.A. and the City and County of San Francisco, acting by and through its Airport Commission. (Airport 
Commission) 

(Public Benefit Recipient.) 

8/7/02, RECEIVED AND ASSIGNED to Finance Committee. 

8/21/02, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Cathy Widener, Governmental Affairs 

Administrator, Airport; Theodore Lakey, Deputy City Attorney; Andre Spearmon, SEIU, Local 790. 

Continued to 9/25/02. 

9/25/02, CONTINUED TO CALL OF THE CHAIR. Speakers: None. 

Heard in Committee. Speakers: Cathy Widener, Airport; Harvey Rose, Budget Analyst. 
RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Daly 
Absent: 1 - Maxwell 



City and County of San Francisco 



Printed at 2:47 PM on 3/5/04 



Finance Committee 



Meeting Minutes 



December 11,2002 



021914 [Laguna Honda Replacement Project] 
Supervisor Hall 

Ordinance authorizing the Director of Public Works (Director) to issue a competitive request for proposals 
(RFP) for the services of a Construction Manager- At-Risk (CM-at-Risk) for the Laguna Honda Hospital 
Replacement Project, and to award a contract for such services based on best qualifications; further authorizing 
the Director to modify and approve the assignment of the City's current professional services contract for 
construction management services with Turner Construction Company/Cooper Pugeda Management, Inc., a 
joint venture (Tumer/CPM, JV) to Cooper Pugeda Management, Inc. (CPM); and to permit Turner 
Construction Company to participate in the RFP for the services of a CM-at-Risk. 

(No Public Benefit Recipient.) 

1 1/18/02, RECEIVED AND ASSIGNED to Public Works and Public Protection Committee. 

1 1/22/02, TRANSFERRED to Finance Committee. Sponsor requests this item be heard on December 1 1, 2002. 

Heard in Committee. Speakers: Michael Lane, Manager for Laguna Honda Budget, Department of Public 

Works; Harvey Rose, Budget Analyst; Roger Brandon. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Daly 
Absent: 1 - Maxwell 



021504 [Prevailing rate of wage and displaced worker protection for workers employed in public off-street 
parking lots, garages, or storage facilities for automobiles on property owned or leased by the CCSF] 
Supervisors Ammiano, Daly, Peskin 

Ordinance adding Section 21.25-2 to the Administrative Code to require that workers employed in public off- 
street parking lots, garages, or storage facilities for automobiles on property owned or leased by the City and 
County of San Francisco be paid the prevailing rate of wage and that such workers will have job protection 
with the successor contractor for a transition period after a lease, management agreement or other contractual 
arrangement is terminated. 

8/26/02, ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 9/25/2002. 

9/13/02, REFERRED TO DEPARTMENT. Referred to Small Business Commission for comment and recommendation. 
10/28/02, SUBSTITUTED. Supervisor Leno submitted a substitute ordinance bearing same title. 
10/28/02, ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Donna Levitt, Labor Standards Enforcement Officer; Mark Gleeson, 
President, Teamsters, Local 665. 

Amended on page 7, line 22, by replacing "may" with "shall." 
Supennsor Peskin added as co-sponsor. 
AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Daly 
Absent: 1 - Maxwell 



City and County of San Francisco 



Printed at 2:4~ PM on 3 '5 04 



Finance Committee 



Meeting Minutes 



December 11, 2002 



021920 (HOME Program Funds] 

Mayor, Supervisor Gonzalez 

Resolution approving amendments to procedures for allocating federal home program funds. (Mayor) 
1 1/18/02, RECEIVED AND ASSIGNED to Finance Committee. 
Heard in Committee. Speakers: Joe La Torre; Alicia Klein. 
RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Daly 

Absent: 1 - Maxwell 



021974 [Issuance of Clean Water Revenue Bonds, 2003 Refunding Series A] 

Resolution approving the issuance of not to exceed $485,000,000 aggregate principal amount of Clean Water 
Revenue Bonds, 2003 Refunding Series A to be issued by the Public Utilities Commission of the City and 
County of San Francisco; and authorizing the taking of appropriate actions in connection therewith and related 
matters. (Public Utilities Commission) 

(No Public Benefit Recipient.) 

12/4/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at the 

December 1 1 , 2002 meeting. 

Heard in Committee. Speaker: Bill Berry, Assistant General Manager for Services, Public Utilities 

Commission. 

AMENDED. 

Resolution approving the issuance of not to exceed $462,660,000 aggregate principal amount of Clean Water 

Revenue Bonds, 2003 Refunding Series A to be issued by the Public Utilities Commission of the City and 

County of San Francisco; provided that issuance of the bonds would result in net debt service savings of at least 

3 percent or $12,028,350; and authorizing the taking of appropriate actions in connection therewith and related 

matters. (Public Utilities Commission) 

(No Public Benefit Recipient.) 

RECOMMENDED AS AMENDED fay the following vote: 

Ayes: 2 - Peskin, Daly 
Absent: 1 - Maxwell 



021126 [Third Amendment to Lease of SFPUC Property for Operation of a Gravel Quarry] 

Resolution authorizing a Third Amendment to Lease of Public Utilities Commission Land between the City and 

County of San Francisco and Santa Clara Sand and Gravel, in Alameda County. (Public Utilities Commission) 

6/18/02, RECEIVED AND ASSIGNED to Finance Committee. 

10/10/02, SUBSTITUTED. Public Utilities Commission submitted a substitute-resolution bearing same title. 

10/10/02, ASSIGNED to Finance Committee. 

Speakers: None. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Peskin, Daly 

Absent: 1 - Maxwell 



City and Count}' of San Francisco 



Printed at 2:47 PM on 3/5/04 



Finance Committee 



Meeting Minutes 



December 11, 2002 



021878 [Lease of City Owned Real Property] 

Resolution authorizing the lease of 2,686 sq. ft. of space at the Main Library to the Friends and Foundation of 
the San Francisco Public Library. (Real Estate Department) 

(Public Benefit Recipient.) 

1 1/20/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Susan Hildreth, City Librarian; Harvey Rose, Budget Analyst; Mr. Chafee; 

Deborah Doyle, Chair, Friends and Foundation of the San Francisco Public Library; Peter Warfield; 

Marquine Gomez, Executive Director, Friends and Foundation of the San Francisco Public Library; 

Theodore Lakey, Deputy City Attorney; Monique Zmuda, Controller's Office. 

RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Daly 

Absent: 1 - Maxwell 



021882 [Lease of City Owned Real Property] 

Resolution authorizing the lease of 387 sq. ft. of space at the Main Library to the Friends and Foundation of the 
San Francisco Public Library for the operation of a bookstore. (Real Estate Department) 

(Public Benefit Recipient.) 

1 1/20/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Susan Hildreth, City Librarian; Harvey Rose, Budget Analyst; Mr. Chafee; 

Deborah Doyle, Chair, Friends and Foundation of the San Francisco Public Library; Peter Warfield; 

Marquine Gomez, Executive Director, Friends and Foundation of the San Francisco Public Library; 

Theodore Lakey, Deputy City Attorney; Monique Zmuda, Controller's Office. 

RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Daly 

Absent: 1 - Maxwell 



021980 [Reserved Funds, Mayor's Office of Community Development] 

Hearing to consider release of reserved funds, Mayor's Office of Community Development (Resolution No. 
121-98), in the amount of $419,000 for the "Construction and Maritime Skills Training Center," a joint MOCD 
and City College construction project at 1400 Evans Avenue. (Mayor) 

12/4/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at the 
December 4, 2002 meeting. 

Heard in Committee. Speaker: Peter Goldstein, Vice Chancellor for Administration, San Francisco 

Community College District. 

Release of reserved funds in the amount of $419,000 approved. 

APPROVED AND FILED by the following vote: 

Ayes: 2 - Peskin, Daly 
Absent: 1 - Maxwell 



ADJOURNMENT 

The meeting adjourned at 3:25 p.m. 



City and Count)' of San Francisco 



Printed at 2:47 PM on 3/5/04 



\s> 



CITY AND COUNTY 




[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 

OF SAN FRANCISCO 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 

December 5, 2002 



TO: -.Finance Committee 

FROM: ^Budget Analyst 

SUBJECT: December 11, 2002 Finance Committee Meeting 

Item 3 -File 02-1752 



DOCUMENTS DEPT. 
DEC 1 6 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



Note: This item was continued by the Finance Committee at its meeting of 
December 4, 2002. 



Department: 
Item: 

Amount: 
Source of Funds: 

Description: 



Department of Children, Youth and Their Families 
(DCYF) 

Hearing to request the release of reserved funds in the 
amount of $700,000 to fund programs for nonprofit 
Community-based organizations. 

$700,000 

General Fund monies appropriated and reserved by the 
Board of Supervisors in the DCYF FY 2002-2003 budget. 

In the FY 2002-2003 budget, the Board of Supervisors 
appropriated $1,700,000 for the DCYF to be used for 
nonprofit community-based organizations. Of the 
$1,700,000 appropriation, the Board of Supervisors 
specifically added $700,000 to the Mayor's Recommended 
FY 2002-2003 budget to fund community-based 
organizations, which the Department is now requesting 
be released. 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



Comments: 



According to Mr. Ken Bukowski of DCYF, the entire 
$1,700,000 will be allocated to nonprofit community- 
based organizations for one-time needs. The nonprofit 
community-based organizations are being selected 
through a single competitive Request for Proposals (RFP) 
process. The attached memorandum (Attachment I) 
provided by Ms. Nani Coloretti of DCYF contains (a) 
additional background information on this subject request 
for the release of $700,000, (b) a description of the RFP 
process, and (c) a description of the process used to select 
the nonprofit community-based organizations to receive 
allocations from the total available funds of $1,700,000. 

1. According to Mr. Bukowski, DCYF received responses 
to its RFP from the 189 nonprofit community-based 
organizations listed in Attachment II. Such requests total 
$10,810,033 or $9,110,033 more than the available 
funding of $1,700,000. 

2. In the professional judgement of the Budget Analyst, 
the subject reserved funds in the amount of $700,000 
should not be released until the DCYF has submitted a 
report to the Board of Supervisors which fully accounts for 
the entire $1,700,000 Board of Supervisors appropriation. 
This report should include (a) identification of the 
nonprofit community-based organizations selected, (b) the 
amount of the allocation to each nonprofit community- 
based organization, and (c) a description of the proposed 
expenditures for each non-profit community-based 
organization. 

3. At the request of the Finance Committee, DCYF has 
provided additional information directly to the 
Committee. 



Recommendation: 



Approval of the requested release of $700,000 is a policy 
matter for the Finance Committee. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 




Page 1 of 1 



Mayor 

Brenda Lopez 

Director 



YOUTH AND THEIR FAMILIES 



DATE: November 7, 2002 

TO: Budget Analyst 

FROM: Nam Coloretti, Director of Budget and Planning 

SUBJECT: Request to Release Reserved Funds 



Pursuant to your request, the Department of Children, Youth, and Their Families (DCYF) hereby 
submits this memorandum in support of its request to release reserve funds in the amount of $700,000 ■ 
to fund nonprofit community-based programs. 

History and Proposed Use of DCYF Reserved Funds 

During the FY 2002-2003 appropriation process, 5700,000 of the general fund monies appropriated to 
DCYF was placed on reserve pursuant to an amendment introduced by Supervisor Sandoval during tie 
Board of Supervisors' review of the budget. Our understanding is that the primary reason for placing 
the $700,000 on reserve was to allow for a more public process to determine the best way to expend 
the funds, rather than rely on the more limited decision-making process of considering specific add- 
back requests made to individual Supervisors. Thus, 5700,000 was placed on reserve for the purpose 
of supporting citywide programs for children and youth, with the understanding that the funds would 
be released after DCYF obtained additional community input as to the best way to target expenditure 
of these monies. 

Having completed a discussion among various stakeholders as to the best way to expend the 5700,000 
placed on reserve, DCYF now requests release of these funds so they may be expended (along with 
51,000,000 in Children's Fund dollars) on grants to community-based organizations that have one-time 
expenditure needs. The decision to utilize the reserve funds and Children's Fund dollars in this 
manner is based on input provided from our Community Needs Assessment and meetings of the 
Children's Fund Citizen's Advisory Committee. The input received from various children and youth 
stakeholders through this public process helped DCYF determine the funding areas to prioritize for 
both the reserved funds ($700,000) and the additional Children's Fund dollars (51,000,000). 

Process Used for Deter minin g Community-Based Organizations to Receive Funding 

DCYF issued a Request for Proposals (RFP) on September 10, 2002, requesting proposals from 
community-based organizations which had one-time expenditure needs such as: operational shortfalls 
due to loss of funding (short term stabilization assistance to maintain services with identified future 
funding sources), agency capacity building (e.g. fundraising, strategic planning), capital expenditures 
(renovations), transportation, funn'ture/fixtures or one-time events. Availability of the RFP was 
advertised in the Independent, through the Board of Supervisors, on DCYF's website and with a 
mailing to approximately 2,000 youth and children service contacts maintained by DCYF. The RFP 
provided that agencies serving children, youth and families could request up to 575,000 for one-time 
use in the areas detailed above. 

Responses to the RFP were due by September 30, 2002. DCYF received 189 complete proposals in 
response to the RFP, with the requests for one-time funding cumulatively totaling more than 510 million la 

1390 Market Street, Suite 900 • San Francisco, CA 94102 . Tel 415.554.8990 ■ Fax 415.554.8965 • TTY 415.934.4847 • www.dcyf.org 

3 



Page £ ot L 
order to determine which, community-based organizations would be selected to receive grants, DCYF 
utilized a citizen review team. The review team, which included members of the Children's Fund Citizens' 
Advisory Committee and people with expertise in youth services and budgeting, ranked each proposal and 
made consensus recommendations to DCYF. All proposals were scored on: 

V Completion of all required forms and adherence to submission instructions; 

V Compelling statement of need; 

V Linkage of expense to improved program delivery; 
■S Reasonable budget 

DCYF staff reviewed the recommendations of the citizen review team to ensure that there was 
geographic, population and service diversity in the proposed funding allocation. DCYF may also use 
interviews and site visits as evaluation methods prior to awarding contracts. 

DCYF has completed the process of reviewing the 1 89 proposals received in response to the RFP. "We 
are awaiting the release of the reserved funds before announcing individual grant amounts and entering 
into contract negotiations with the organizations. However, the grant selection process for the 
Children's Fund dollars has been completed in order to ensure this funding can be utilized by 
community organizations at the earliest possible date. 

Request to Release Reserve Funds 

During budget discussions earlier this year, Board of Supervisors members indicated that it was better 
public policy for expenditure decisions to be based on a public process that examined neighborhood 
needs and gaps in services rather than specific add-back requests to individual Supervisors. Thus, 
S70O,O00 in general fund monies appropriated to DCYF was placed in reserve so that DCYF could 
receive additional input from community stakeholders and determine the best use of these funds. As 
requested, DCYF has conducted this process by utilizing the extensive community input that was pari 
of the Community Needs Assessment and by determining priority needs with the assistance of the 
Children's Fund Children's Advisory Committee. This process resulted in a decision to fund one-time 
expenditures of community-based organizations based on a competitive RFP process to decide which 
specific organizations would receive funding. 

The recommendation of the Budget Analyst that a detailed list of proposed grantees and grant amounts 
be made public (and open to debate) prior to the release of the reserved funds would appear to defeat 
the policy intent of the Board in seeking to ensure the use of these funds was decided based on a public 
process that broadly examined community needs. The release of a proposed grantee list would likely 
result in individual organizations that have not have been selected for funding through this competitive 
process demanding that their specific requests now be considered outside of the pub he process that his 
already taken place. Reopening the process in this manner would not appear to be supported by the 
policy discussion that occurred when these funds were initially placed on reserve. 

It is also important that there be no farther delay in allocating these funds to community-based 
organizations, particularly considering that many of the requests were for funds to ensure that services 
to children and youth would not be cut back during this fiscal year. It is in the best interest of 
maintaining children and youth services that the release of these funds be expedited so that the money 
can get out into the community to meet the immediate needs, such as those articulated by community- 
based organizations at the October Finance Committee meeting. 

Thank you for your assistance in expediting the release of these funds so we can address the critical 
needs in our communities. 



Attacnment 1 i 
Page 1 of 4 



List of 1 89 Organizations Requesting One-Time Funds from DCYF 



Vgency-^Name., 



; r.iZL~-: .---,:--,: 



A Home Away From Homelessness 



$45,000j 



African American Art and Culture Complex 



$75,000} 



After School Enrichment Program 



Alemany Resident Mgmt. Corp. 



$41,782! 



$75,000 



Allen Community Development Corp. 



$75,000 
$75,000] 



Ark of Refuge, Inc 



Asian Perinatal Advocates 



$75,000! 



Asian Women's Shelter 



Back on Track 



$75,000! 



$51,375| 



Bay Area Girls Center 



Bay Area Network for Diversity Teaching in Early 



$35,000! 



$62,317! 



Bayview Hunter Point Foundation for Com. Imp. 



$57,809 1 



Bayview Opera House, Inc. 



Bemal Heights Neighborhood Center 



$75,0001 



$63,275 



Booker T. Washington Community Service Ctr. 



$75,000! 



Brava! For Women in the Arts 



$74,972! 



jBrothers Against Guns, Inc 



$75,000! 



[California Community Dispute Services 



jCalifornia Lawyers for the Arts 



$45,510! 



$53,6251 



CARECEN 



$75,000? 



jCareer Resources Development Center 



$41,1591 



jCenter for Human Development 



jCenterfor Young Women's Development 
[C harity Cultu ra I S ervices C enter 
IChfld Care Law Center 



$44,585] 

$67,3721 



$9,562; 



$74,980! 



jChildren of Lesbians & Gays Everywhere COLAGE 
jchildren's Day School, Inc. 



$56,4901 



$74,180! 



jChinatown Community Development Center 



$55,0001 



Civic Center Child Care Corportation 



$75,0001 



Community Alliance for Special Education 



$13,7501 



Community Brd Prgrm Juv. Victim Offender (JVORP) 



$75,0001 



Community Housing Partnership 



Community Music Center 



$41,0001 



$70,056! 



Community Network for Youth Development 



$50,000! 



Community Works 


$40,822j 


Compass Community 


$24,922? 


Cross Cultural Family Center 


$75,000| 


Donaldina Cameron House 


$56,256| 


Economic Opportunity Council of San Francisco 


$75,000| 


Edgewood Center for Children and Families 


$75,000j 


Ella Hill Hutch Community Center 


$74,842i 


Enterprise for High School Students ■ 


$48,060; 


Even/child Can Learn Foundation 


$74,970! 


Family Restoration House 


$75,000| 


Family Service Agency of San Francisco 


$56,919; 


Family Support Services of the Bay Area 


$29,750; 


Filipino American Arts Exposition 


$67,600 


Florence Crittenton Services 


$75,000 


FranDelJA Enrichment Center 


$75,000! 





Attachment II 
Page I of 4 


Friends of Recreation and Parks 


$63,1695 


Friends of St. Francis Childcare Center 


$75,000j 


Gateway High School 


$58,967! 


Gatinell's Tender Loving Care Residence 


$75,000) 


Girls After School Academy 


$75,000' 


GirlSource, Inc. 


$34,360 


Glenridge Cooperative Nursery School 


$7,220 


Glide FoundationyGlide Memorial United Methodists 


$74,955 


Good Samaritan Family Resource Center 


$43,155 


Gum Moon Residence Hall 


$44,165 


Health Initiatives for Youth 


$49,916 


Hearing Society of the Bay Area, Inc. 


$22,326 


Holy Family Day Homes of San Francisco 


$73,1191 


Homeless Children's Network 


$74,745| 


Homeless Prenatal Program (HPP) 


$63,000! 


Horizons Unlimited of San Francisco, Inc. 


$30,4501 


Huckleberry Youth Programs 


$50,000 



Hunters Point Boys & Girls Club 



$62,650 



Idris Ackamoor and Cultural Odyssey 



$75,0001 



jlndochinese Housing Development Corporation 



$75,000j 



| Infant toddler Consortium 



$53,0001 



ilnner City Youth 



$75,000* 



Uames Lick Middle School PTSA 



$68,0001 



jJamestown Community Center 



$56,000| 



Japanese Community Youth Council 



$29,000] 



Jewish Family and Children's Services 



$75,000! 



IJewish Vocational & Career Counseling Service 



$40,000! 



Juma Ventures 



$75,000j 



jKai Ming, Inc. 



$75,000! 



JKids' Turn 



$32,5001 



IKorean American Women Artists ^Writers Association 



$70,000| 



jLa case De las Madres 



$20,640s 



Larkin Street Youth Sen/ices 



$75,000! 



iLavender Youth Recreation & Info Center LYRIC 



$64,0291 



{Leadership High School 



{Legal Services for Children 



$30,000| 



$65,555? 



[Literacy for Environmental Justice 



$75,0001 



I Little Children's Development Center 



$75,000| 



(Men Overcoming Violence (MOVE) 



$50,1001 



•Miraloma Nursery School 



$75,000} 



iMission Cultural Center for Latino Arts 



$66,872| 



Mission Area Health Associates, Inc. dba MNHC 



$74,998! 



Mission Child Care Consortium 



$75,000] 



Mission Dolores School 



$75,000! 



Mission Education Projects Inc. 



$31,485 



Mission Housing Develop. Corp. (MHDC) 



$75,000 



Mission Language and Vocational School, Inc. 



$74,857! 



Mission Learning Center 



$76,800! 



lission Neighborhood Centers, Inc. 



$75,000^ 



Mission Youth Soccer League 



$74,850; 



Moss Beach Homes, Sunset Neigh. Beacon Center 



$34,890! 



Multicultural Educational, Training & Advocacy 



$8,500] 



Music in schools today 



$43,948i 



Page 3 of 4 



Musical Theatre Works 


$7,0001 


New Direction 21st Century 


$75,0001 


NICOS Chinese Health Coalition 


$75,0001 


Nihonmachi Legal Outreach dba Asian Pac. Islander 


$70,499| 


Nihonmachi Little Friends 


$75,0001 


Northern California Council for the community 


$52,8511 


Northern California Service League 


$55,0001 


Ohlhoff Recovery Programs 


$31,485] 


Omega Boys Club 


$75,000f 


Our Kids First 


$38,4611 


Pacific News Services' 


$74,7481 


Parent Voices 


$61,200! 


Parents for Public schools of San Francisco 


$20,4751 


Parents helping Parents San Francisco 


$68,228! 


Philippine Resource Center 


$31,500 


j Playtime Center 


$75,0001 


I Polly's Family Support Center 


$75,000? 


Private Industry Council 


$75,000? 


|PTA Cal. Cngrss of Parents, Teach, Stud. Alvarado 


$40,400! 


j Recreation Center for the handicapped 


$32,250f 


I Renaissance Parents of Success 


$75,000| 


| Richmond District Neighborhood Center 


$17,504! 


|SF Arts Education Project 


$75,0001 


JSF Bar Association Volunteer Legal Services Prog. 


$31,6554 


|SF Brown Bombers POP Warner Club, Inc. 


$74,970! 


|SF Conservation Corps 


$62,8353 


SF Council of Parent Participation Nursery Schools 


$5,700f 


SF Court Appointed Special Advocates 


$75,0005 


SF Educational Fund 


$27,2541 


SF General Hospital Foundation 


$75,000^ 


! SF League of Urban Gardeners (SLUG) 


$74,921| 


|SF School Volunteer 


$4,7771 


SF Starting Points Initiative 


$74,000^ 


SF Study Center 


$68,275i 


SF Urban Service Project 


j $20,000] 


|SF Women Against Rape 


$32,340! 


JSF Women's Centers, Inc. 


$20,000'! 


sSFHA Housing Corporation 


$74,6675 


iSFSU Foundation Inc. 


$66,250] 


|SFSU Foundation, Inc. 


$75,686? 


jSFSU Foundation-Mission Science Wrkshops 


$44,4611 


jSouI'd Out Productions 


$75,0003 


jSouth of Market Child Care, Inc. 


$72,1861 


i Southwest Community Corporation 


$75,0001 


St. Francis Memorial Hospital, Rally Family Visit. 


$53,166! 


St. John's Educational Threshold Center-YouthSpace 


$75,000; 


St. John's Educational Thresholds Center 


$34,925! 


St. Vincent de Paul Society 


$70,6705 


Stern Grove Festival Asociation 


$25,000j 


Streetside Stories, Inc. 


$14,760) 


Sunset Youth Sen/ices 


$71,000] 


jSupport for Families of Children with Disabilities 


$50,841 1 


Telegraph Hill Neighborhood Association 


$41,193 





Page 4 of 4 


Tenderloin Neighborhood Development Corporation 


$23,570! 


The Children's Psychological Health Ctr. 


$27,830! 


The Community Center Project of San Francisco, Inc 


$71,084! 


The International Institute of San Francisco 


$50,OOOJ 


The Korean Center, Inc. 


$74,841! 


The Regents of the University of California 


$33,090! 


The San Francisco Child Abuse Prevention Center 


$66,267] 


The Young Scholars Program 


$65,0001 


Tides Center- Oasis 


$63,585; 


Tides Center/Infusion-One 


$75,000! 


United way of the Bay Area 


Sio.ooo! 


Vietnamese Youth Development Center 


$34,026! 


Visitacion Valley Community Center 


$74,100] 


Visitacion Valley Job, Education and Training 


$72,638! 


Voice Over Video Network (dbaTILT) 


$66,434! 


Wah Mei School 


$10,000( 


Wajumbe Cultural Institution, Inc. 


$75,000! 


Walden House, Inc. 


$62,892j 


West Bay Pilipino Multi-Service, Inc. 


$36,435! 


Wesiside Community Mental Health Center, Inc. 


. $75,000! 


Whitney Young Child Development Centers, Inc. 


$72,400! 


World Arts West 


$74,314! 


Wu Yee Children's Center 


$75,00(3 


YMCA — Bayview Hunter's Point 


$75,O0O| 


YMCA -- Chinatown 


$75,O0O| 


YMCA - Embarcadero 


$24,339] 


YMCA -- Richmond District 


$45,570! 


YMCA- Shin Yu-Lang Central of San Francisco 


$51,600! 


YMCA - Stonestown Family YMCA 


$73,41 61 


YMCA - Urban Services 


$53,1301 


YMCA of San Francisco - Mission Branch 


$65,314! 


YMCA of SF (Buchanan YMCA) 


$20,000? 


Young Community Developers, Inc. 


$75,000! 


Youth Guidance Center Improvement Committee 


$73,863; 


Total Amount Requested 
Average Request (510,810,033/189) 


$10,810,033 
$57,196 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

Item 4 - File 02-1324 

Note: This item was continued by the Finance Committee at its meeting of 
August 21, 2002, pending further negotiations with Wells Fargo Bank, N.A. 
regarding the authority of Wells Fargo Bank to terminate the proposed 
lease. 



Department: 
Item: 



Location: 



Purpose of Lease: 



Lessor: 



Lessee: 



Annual Rental 
Revenues Payable by 
Wells Fargo Bank to 
the Airport: 



Airport 

Resolution approving the Domestic Terminals Automated 
Teller Machine Lease A between Wells Fargo Bank, N.A. 
and the City and County of San Francisco, acting by and 
through its Airport Commission, for the operation of ten 
automatic teller machines (ATMs) at the Airport's North 
and South Terminals and the Airport's Rental Care 
Facility. 

The North and South Terminals and the Rental Car 
Facility, San Francisco International Airport 

The proposed new five year and 90 day lease would 
provide space at ten locations throughout the Airport's 
North and South Terminals and the Airport's Rental Car 
Facility to Wells Fargo Bank, NA. to operate one 
automated teller machine (ATM) at each of the ten 
different locations. These ten ATMs would operate 24 
hours per day, seven days a week at the locations listed in 
Attachment I provided by the Airport. 

City and County of San Francisco, acting by and through 
its Airport Commission. 

Wells Fargo Bank, N.A., a California corporation 



Minimum Annual Guarantee (MAG) of $282,000, to be 
adjusted annually by the percentage increase in the 
Consumer Price Index's "All Urban Consumers - Other 
Goods and Services" index and in accordance with 
enplanement data as specified in the proposed lease. In 
no event would the MAG be less than the prior year's 
amount. In addition to the MAG, Wells Fargo Bank 
would pay the Airport: 
BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



• A percentage rent of 33 percent of any commission, 
surcharge, or other fee charged by Wells Fargo Bank 
to an ATM customer. 

• A transaction rent of $0.10 for each customer use of a 
Wells Fargo Bank ATM. 1 

• A promotional charge of $1.00 per square foot per year, 
if the Airport launches an Airport marketing and 
promotional campaign. 

According to Mr. David Pfeiffer of the Airport, under the 
existing lease between the Airport and Wells Fargo Bank, 
N.A., which began on February 16, 1998, Wells Fargo 
Bank will pay the Airport, for the last year of the lease, 
from February 16, 2002 to February 15, 2003, (a) the 
required MAG of $204,234, and (b) a percentage and 
transaction rent estimated at $114,038, for a total 
estimated payment by Wells Fargo Bank to the Airport of 
$318,272. 

As stated above, under the proposed lease, Wells Fargo 
Bank is required to the pay the Airport a MAG of 
$282,000 for the first year of the proposed lease. Mr. 
Pfeiffer advises that the Airport is unable to estimate the 
amount of the percentage and transaction rent for the 
first year of the proposed lease payable by Wells Fargo 
Bank to the Airport because of the current uncertain 
economic conditions. 



Term of Lease: 



Right of Renewal: 



The MAG of $282,000 for the proposed lease to operate 
ten ATMs is $77,766 or approximately 38.1 percent more 
than the MAG of $204,234 for the last year of the existing 
lease to operate ten ATMs. 

The proposed lease would be for a term of five years and 
up to an additional 90 days for initial construction of 
required tenant improvements, commencing no earlier 
than February 16, 2003. 

The Airport would have sole discretion to grant two one- 
year extensions. 



1 The transaction rent would not be payable with respect to (a) commissions, surcharges, or 
other fees on which percentage rent is payable, and (b) ATM customer transactions which are 
aborted. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

10 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



Utilities and Janitor 
Provided by Lessor: 



Wells Fargo Bank would pay for the cost of all utilities 
and janitorial services. 



Tenant 
Improvements: 



Description: 



Comments: 



Wells Fargo Bank is required to spend at least $250 per 
ATM location to renovate its ten existing ATM locations 
within 90 days, for a total estimated cost of at least 
$2,500 2 . 

On May 7, 2002, the Airport Commission authorized 
Airport staff to accept competitive bids to operate a total 
of ten ATMs in the Airport's North and South Terminals 
and the Airport's Rental Car Facility (Domestic Terminals 
ATM Lease A 3 ). Subsequently, on July 9, 2002, the 
Airport Commission awarded Lease A to Wells Fargo 
Bank, N.A., as the highest responsive and qualified 
bidder, with a MAG of $282,000 for the first year of the 
lease. Under the proposed lease, Well Fargo Bank would 
operate ten ATMs, each one at a different location 
throughout the Airport's North and South Terminals and 
at the Airport's Rental Car Facility. 

1. According to Mr. Pfeiffer, the Airport sent Invitations 
to Bid for the subject lease to 304 firms. The Airport had 
required a minimum MAG bid amount of $180,000. The 
percentage rent and the transaction rent payable by the 
lessee were set by the Airport and were therefore the 
same for all bidders. According to Mr. Pfeiffer, seven 
potential bidders attended the Airport's pre-bid 
conference held on April 17, 2002. Subsequently, two 
firms submitted a bid: (a) Wells Fargo Bank with a MAG 
of $282,000 ($102,000 more than the Airport's required 



2 This amount of $250 does not include the costs to Wells Fargo Bank of purchasing and 
installing the ATMs themselves. 

3 According to Mr. David Pfeiffer of the Airport, Domestic Terminals ATM Lease B is for five 
ATM locations at the Airport. The Airport required a MAG of no less than $95,000. 
Domestic Terminals ATM Lease B was awarded to the Union Bank of California which bid a 
MAG of $120,000 per year for five years, with two one-year options. According to Ms. 
Adrienne Go of the City Attorney's Office, Domestic Terminals ATM Lease B does not require 
Board of Supervisors approval because the projected revenue generated by the contract is 
less than $1,000,000 over the term of the contract. $1,000,000 in revenues is the threshold 
specified in Charter Section 9.118 for Board of Supervisors approval of revenue-generating 
contracts and leases. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
11 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

MAG of $180,000), and (b) Union Bank of California with 
a MAG of $250,000 ($70,000 more than the Airport's 
required MAG of $180,000). As previously noted, the 
MAG of $282,000 for the proposed lease is $77,766 or 
approximately 38.1 percent more than the MAG of 
$204,234 for the last year of the Airport's existing lease 
with Wells Fargo Bank, which expires on February 15, 
2003. 

2. In November of 1999, voters approved Proposition F 
prohibiting financial institutions from imposing 
surcharges on ATM customers. According to Ms. 
Adrienne Go of the City Attorney's Office, Section 2.5 of 
the proposed lease provides that if and when Proposition 
F is deemed by a court of competent jurisdiction to be 
applicable to Wells Fargo Bank's operations at the 
Airport, Wells Fargo Bank would have the right to 
terminate the lease. 

3. As stated in Attachment II, provided by Ms. Cathy 
Widener of the Airport, at the request of the Finance 
Committee, the Airport resumed negotiations with Wells 
Fargo Bank in order to eliminate the lease provision 
which would enable Wells Fargo Bank to terminate the 
proposed lease if Proposition F is upheld by the Courts, 
thereby prohibiting Wells Fargo Bank from imposing 
surcharges on its ATM customers. Ms. Widener reports 
that Wells Fargo Bank declined to agree to delete the 
language granting Wells Fargo Bank the right to 
terminate the proposed lease under the provisions of 
Section 2.5 of the lease. Ms. Widener states in her 
memorandum (Attachment II) that "Because of the 
favorable business terms of the lease, as well as a recent 
decision by the United States Court of Appeals for the 
Ninth Circuit regarding ATM fees (attached for your 
review), the Airport is requesting approval of the 
proposed lease." 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

12 



Attachment I 




EXHIBIT A 
PREMISES 



Approximately ten (10) ATM locations as indicated on the attached drawings. 

1. Terminal 3, 2 nd Level, across from Gates 70-71 (1) 

2. Terminal 3, 1 st Lev., Am. Airlines baggage claim, behind escalator (1) 

3. Terminal Ex, United Airlines Express Terminal (1) 

4. Terminal 1,2 nd Level, B/AC near Gate 42(1) 

5. Terminal 1, 1 st Level, behind Carousel 7 (1) 

6. Terminal 3 , 2 nd Level, B/A F before Gate 84 (1) 

7. Terminal 3, 1 5! Level, near carousel 3 (1) 

8. Rental Car Facility (1) 

9. ■ Terminal 1, 2 nd Level, B/A C, Pre-Security (1) 

10. Terminal 1 , 2 nd Level, B/A B across from Gate 22 ( 1) 



Exhibit A - Page 1 
13 



FROM -SFLA AJMIN UoU) ^l-^JUi 



Attac nment 1 1 
Page 1 of 2 



San Francisco International Airport 



MEMORANDUM 



TO: 



Alan Gibson 

Budget Analysts Office 



PC. 8ox SD07 

ian rranciuxi.CA 941^ 

Tel 6SO.4.21.SDIJ0 
Kk 650.8," 1.S00S 
wvvw.fly;fo.:om 



FROM: Cathy Widener 

SUBJECT: Domestic Terminal ATM Lease, File No. 02-1324 



AIRPORT 

COMMISSION 

CITY AMD COUNT" 

Of SAN fftiMOSCO 
WIIUE L BROWN. JR 

MJrou 

HfMRV £ BERMAN 

l/\P.dT MAZI'JLA 
VIC£ PHeSlDCNT 

MlCHAFl 5 JTBUMSKV 

UNO* 5 CBAvroN 

f.ARv.. ITO 



jOH* L. MAflTIH 



At the request of the Finance Committee, Airport staff asked Wells Fargo 
Bank to agree to the deletion of Section 2.5 (Proposition F lease termination 
language) in the pending lease agreement. Wells Fargo decline to delete the 
language. 

As the option to terminate language was part of the RFP, and the financial 
institutions who placed bids did so based partially on this option, the Airport is 
requesting that this item be considered as originally presented. 

Because of the favorable business terms of the lease, as well as a recent 
decision by the United States Court of Appeals for the Ninth Circuit regarding 
ATM fees (attached for your review), the Airport is requesting approval of the 
proposed lease. 

Thank you and please feel free to contact me should you be in 
need of further information. 



14 



NOU-20-2002 09=15 



6508215005 



Attainment il 
Page 2 of 2 



PRIVILEGED AND CONFIDENTIAL 



Cathy Widener 

San Francisco International Airport 



The purpose of this memorandum is to confirm our verbal 
discussions regarding Proposition F [ATM Fees] adopted by the 
voters in 1999 (together with the near identical ordinance 
adopted in Santa Monica, the "Ordinances") . 

Following the passage of the Ordinances, certain banks and the 
California Bankers Association challenged the validity of the 
Ordinances; the federal district court agreed with the banks, 
and permanently enjoined San Francisco and Santa Monica from 
enforcing the Ordinances. 

The cities appealed the decision to the 9th Circuit Court of 
Appeals. On October 25, 2002, the Court ruled against the 
cities, agreeing with the district court's determination that 
the Ordinances are preempted by federal law, and confirmed the 
permanent injunction prohibiting the cities from enforcing the 
Ordinances. San Francisco now seeks to have the matter reheard 
by the 9th Circuit "en banc", but that procedure is subject to 
the discretion of the 9th Circuit. Further, San Francisco may 
seek to have the matter heard by the U.S. Supreme Court, but 
that is also discretionary. 



Adrienne Go, Deputy City Attorney 
650-821-5077 



15 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

Item 5 -File 02-1914 



Department: 
Item: 



Description: 



Department of Public Works (DPW) 

Ordinance authorizing the Director of Public Works 
(Director) to issue a competitive request for proposals 
(RFP) for the services of a Construction Manager-At-Risk 
(CM-at-Risk) for the Laguna Honda Hospital 
Replacement Project, and to award a contract for such 
services based on best qualifications. This ordinance 
further authorizes the DPW Director to terminate the 
City's current professional services contract for 
construction management services with Turner 
Construction Company/Cooper Pugeda Management, Inc., 
a joint venture (Turner/CPM, JV) and to assign this 
contract to Cooper Pugeda Management, Inc. (CPM). The 
ordinance permits Turner Construction Company 
separate from the joint venture with Cooper Pugeda 
Management, Inc. to participate in an RFP for a CM-at- 
Risk contract. 

Presently Turner Construction Company/Cooper Pugeda 
Management, Inc., a joint venture, is the Construction 
Manager for the Laguna Honda Hospital Replacement 
Project. The proposed ordinance would authorize DPW to 
issue a Request for Proposals (RFP) for a CM-at-Risk for 
the Laguna Honda Hospital Replacement Project. The 
CM-at-Risk does not replace a Contract Management 
Services contractor but would take over the future 
responsibilities of a General Contractor when 
construction on the project starts. According to Mr. 
Michael Lane of DPW, who is the Program Manager of 
the Laguna Honda Hospital Replacement Project, rather 
than the City awarding multiple prime contracts for 
construction of different portions of the work and being 
responsible for coordinating work among the various 
prime contractors, the City will hold only a single contract 
with a CM-at-Risk. The DPW had planned to secure a 
Construction Management Services contractor, and 
several General Contractors. Under the proposed 
ordinance, the DPW would instead secure a Construction 
Management Services contractor and one CM-at-Risk, 
instead of a traditional General Contractor approach with 
several General Contractors. Under the CM-at-Risk 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

16 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



approach the Construction Management Services 
contractor would prepare and update construction 
schedules, conduct contract administration and logistics 
planning and hire a State-required "Inspector of Record,"* 
and the CM-at-Risk would provide services similar to a 
General Contractor, including management services, 
conducting the selection process for construction 
subcontractors and suppliers, and entering into 
subcontracts for construction and suppliers, instead of the 
City itself handling such responsibility. The CM-at-Risk 
would also be responsible for phasing the work for the 
project, managing the subcontracts and guaranteeing the 
maximum price and deadlines for the work performed. 
Under the proposed CM-at-Risk contract for the Laguna 
Honda Hospital Replacement Project, the CM-at-Risk 
would serve as the sole Prime Contractor and would agree 
to a Guaranteed Maximum Price (GMP) for all of the 
professional services to be performed by the CM-at-Risk 
and construction work to be performed by all of the 
subcontractors of the CM-at-Risk. There would be one 
Prime Contractor, the CM-at-Risk, and all other 
contractors on the project would be subcontracted to the 
CM-at-Risk. 

The difference between a CM-at-Risk approach and a 
traditional General Contractor approach is that it would 
allow the City to proceed with one Prime Contractor 
although the Laguna Honda Hospital Replacement 
Project is a multi-phased construction project, according 
to Mr. Lyndon Chee of the City Attorney's Office. In 
Attachment I, Mr. Chee reports that without a CM-at- 
Risk, "the City could proceed with a single contract to 
procure construction of all structures. However, this 
would delay the project because a single all-encompassing 
contract could not be bid until the design of each and 
every structure was complete. A phased program allows 
the City to bid contracts as the design of discrete 
components of the program are completed." Mr. Chee 
further states in Attachment I that the City is protected 
from potential liability resulting from CM-at-Risk 
contract relationships with subcontractors because "under 



* Prior to commencement of construction, the Office of Statewide Health Planning and Development 
requires a certified inspector to serve on a specific job as the Inspector of Record (IOR). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

17 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



the proposed CM-at-Risk project delivery method, the 
City will have only one construction contract. For a fee, 
the CM-at-Risk will assume responsibility for managing 
and coordinating all the construction work. 
Consequently, the CM-at-Risk will be liable for any 
impact that work on one phase may have on another. 
While the CM-at-Risk does not eliminate disruption 
claims from the program, liability for such claims is 
shifted to the CM-at-Risk who is better able and more 
experienced in coordinating the subcontractors." 

According to Mr. Lane, under the proposed CM-at-Risk 
approach, DPW would conduct a public, competitive, 
qualifications-based RFP selection process for selecting 
the CM-at-Risk. Mr. Lane reports that if the Board of 
Supervisors approves the proposed ordinance, the DPW 
will issue an RFP as soon as this subject ordinance is 
finally approved, estimated to be February of 2003. The 
CM-at-Risk contract selected by DPW will be subject to 
final approval by the Board of Supervisors in accordance 
with Charter Section 9.118 (b) because the contract will 
exceed $10 million (see Comments Nos. 1 and 3). 
Attachment II, provided by Mr. Lane, further explains the 
proposed CM-at-Risk approach for the Laguna Honda 
Hospital Replacement Project. Regarding the GMP, Mr. 
Lane states "From a financial point of view, assuming 
local business participation goals are being met through 
the bidding process, the CM-at-Risk is equivalent to a 
competitive bid situation on the construction work." 

The proposed ordinance would also authorize the DPW 
Director to terminate DPW's existing contract with 
Turner Construction Company/Cooper Pugeda 
Management, Inc., a joint venture for construction 
management services for the Laguna Honda Hospital 
Replacement Project. The modification would remove 
Turner Construction Company from the existing 
Construction Management Services contract, which 
expires December 31, 2002 (see Comment No. 2), 
terminate or reduce in scope the portion of the 
Construction Management Services contract scope of work 
for prospective work which would be included in the CM- 
at-Risk contract, and assign the Construction 
Management Services contract with reduced scope of 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

18 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



work to Cooper Pugeda Management, Inc., to serve as the 
sole Construction Manager. In Attachment III, Mr. Lane 
states that DPW is proposing to modify the current 
contract for construction management services for the 
Laguna Honda Hospital Replacement Project because "the 
complexity of the project has increased significantly as the 
design has progressed." In addition Mr. Lane states in 
Attachment III that under the proposed CM-at-Risk 
approach DPW would continue to use Cooper Pugeda 
Management, Inc. (CPM) because "CPM and its 
consultants are qualified to provide the services needed 
by the project and to date have performed satisfactorily" 
and because "the department will continue to need the 
services of a construction management firm, which needs 
to be independent of the CM-at-Risk." As stated 
previously, the work to be done by the Construction 
Manager is updating construction schedules, conducting 
contract administration and logistics planning and 
providing a State-required Inspector of Record. The CM- 
at-Risk would conduct the selection process for 
construction subcontractors and suppliers, enter into 
subcontracts for construction and suppliers, would be 
responsible for phasing the work for the project, 
managing the subcontracts and guaranteeing the 
maximum price and deadlines for the work performed. 
According to Mr. Lane, Turner Construction 
Company/Cooper Pugeda Management, Inc., a Joint 
Venture, was selected through a competitive Request for 
Qualifications (RFQ) process. The proposed ordinance 
further permits Turner Construction Company, once 
released from its current contract for construction 
management services for the Laguna Honda Hospital 
Replacement Project, to bid on the proposed RFP for the 
CM-at-Risk contract separate from its joint venture with 
Cooper Pugeda Management, Inc. According to Mr. Lane, 
Cooper Pugeda Management, Inc. would not be eligible to 
bid on the proposed RFP for the CM-at-Risk contract 
because Cooper Pugeda Management, Inc. would hold the 
Construction Management Services contract. In 
Attachment III Mr. Lane further explains (a) the proposed 
modifications to the current contract for construction 
management services for the Laguna Honda Hospital 
Replacement Project; (b) the reason DPW is proposing to 
remove Turner Construction Company from the existing 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

19 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

Construction Management Services contract; (c) the 
reason DPW is proposing that Turner Construction 
Company be permitted to bid on the RFP for the CM-at- 
Risk contract; and (d) how the RFP will be conducted to 
ensure that Turner Construction Company does not have 
an unfair advantage in the competitive selection process 
for the CM-at-Risk contract due to its current contractual 
relationship with DPW as the Construction Manager on 
the Laguna Honda Replacement Project. Attachment IV 
is a memorandum from Turner Construction Company 
stating that it has agreed to be released from its 
Construction Management Services contract in order to 
bid on the proposed CM-at-Risk contract. 

Comments: 1. The Laguna Honda Hospital Replacement Project is 

estimated to cost $401.6 million. Attachment V, provided 
by Mr. Lane, contains a budget for the Laguna Honda 
Hospital Replacement Project, including estimated 
expenditure amounts and sources of funds. Mr. Lane 
reports that the total amount that DPW would budget for 
a Construction Manager Contractor and CM-at-Risk 
contract, or an estimated $39 million, is the same as the 
total amount that the DPW had budgeted for a 
Construction Manager Contractor and a General 
Contractor under the traditional approach. 

2. Mr. Lane reports that the existing contract for 
construction management services with Turner 
Construction Company/Cooper Pugeda Management, Inc., 
a joint venture (Turner/CPM, JV), as the Construction 
Manager, in the amount of $1.7 million, will expire 
December 31, 2002. Under the traditional General 
Contractor approach, the DPW had planned to modify the 
Construction Management Services contractor year by 
year through the completion of the project. As stated 
previously, under the proposed CM-at-Risk approach, the 
DPW would assign this Construction Manager contract 
solely to Cooper Pugeda Management, Inc. (CPM). Mr. 
Lane reports that under the CM-at-Risk approach the 
DPW would modify the Construction Management 
Services contract year by year through the completion of 
the project, as under the traditional General Contractor 
approach. However, Mr. Lane advises that under the CM- 
at-Risk approach the total estimated budget for the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

20 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



Construction Manager Contract would be reduced from an 
estimated total amount of $10 million to an estimated 
total amount of $7 million. The Budget Analyst notes 
that the Construction Manager Contract and contract 
modifications are not subject to final approval by the 
Board of Supervisors in accordance with Charter Section 
9.118 (b) because the Construction Manager contract with 
Cooper Pugeda Management, Inc. will not exceed $10 
million cumulatively. 

3. Mr. Lane reports that the Architect's drawings and 
specifications for the Laguna Honda Hospital 
Replacement Project will be completed in December of 
2002 and that the DPW anticipates receiving the 
necessary permits to begin construction work by June of 
2003. Mr. Lane advises that at the conclusion of the RFP 
process to select the CM-at-Risk, the selected CM-at-Risk 
would be required to obtain construction subcontractor 
and supplier bids and submit a Guaranteed Maximum 
Price (GMP) for all of the CM-at-Risk professional 
services and construction work to be performed that is 
within the City's estimated budget. Mr. Lane reports that 
the DPW has budgeted a GMP of $250 million for the 
professional services and construction work that would be 
included in the CM-at-Risk contract, out of the total 
Laguna Honda Replacement Project estimated cost of 
$401.6 million. In Attachment V, Mr. Lane reports that 
the estimated budget for the CM-at-Risk contract includes 
CM-at-Risk services for $29 million and subcontractors 
under the CM-at-Risk for $221. 

4. Construction is estimated to be completed and the new 
hospital is to become fully operational in 2009, according 
to Mr. Lane. Mr. Lane further reports that of the total 
1,200 new hospital beds, 780 beds will be operational in 
2007, with the remaining 420 beds becoming operational 
in 2009, due to the phasing of the construction. 

5. According to Mr. Lane, once the GMP scope and 
amount have been agreed to by the DPW and the CM-at- 
Risk, contract modifications and/or changes to the GMP 
would only occur if changes to the work required under 
the Architect's drawings and specifications are made. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

21 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



6. The proposed ordinance requires that the CM-at-Risk 
contract provide that the CM-at-Risk contractor use a 
competitive bid process to award all construction 
subcontracts and select suppliers and prequalify major 
subcontractors. In Attachment I, Mr. Lane states that a 
"CM-at-Risk contract would increase M/WBE 
participation for professional services performed." In 
addition, Mr. Lane states in Attachment I that the "CM- 
at-Risk contract would include the City's local hiring and 
M/WBE goals for all construction work performed by 
subcontractors." According to Mr. Lane, M/WBE 
participation goals for construction subcontracts will be 
the same as under existing City ordinances. Mr. Lane 
states that under the proposed CM-at-Risk approach, the 
Human Rights Commission and DPW would set the 
M/WBE participation goals in the same manner as they 
are set under the traditional General Contractor approach 
and the M/WBE participation goals would be specified in 
the CM-at-Risk contract. 

7. Mr. Lane states in Attachment I that: 

• CM-at-Risk allows the DPW to best manage this 
complex project. 

• CM-at-Risk provides the City with a 
Guaranteed maximum price (GMP) for the 
work. 

• CM-at-Risk provides for better coordination and 
control of the work. This results in less of an 
impact to the Laguna Honda Hospital residents 
and surrounding community and a potentially 
safer project. 

• CM-at-Risk allows DPW to better manage its 
exposure to cost overruns due to change orders 
resulting from coordinating multiple contractors 
simultaneously on site. 

• CM-at-Risk allows a greater participation of 
M/WBE in professional services contracts. 

According to Mr. Lane, the above-mentioned benefits of 
the CM-at-Risk approach result from the fact that the 
City would contract with only one CM-at-Risk, rather 
than with several General Contractors and from 
incentives the DPW would include in the contract. Mr. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

22 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

Lane further states in Attachment I that "there are also 
potential efficiencies in the management of the project 
inherent in the CM-at-Risk approach, which could yield a 
financial benefit to the project. I have not attempted to 
quantify those efficiencies. Finally, the potential for 
change orders after bid can be mitigated by providing the 
CM-at-Risk with an incentive to minimize the cost of such 
changes. This would be an improvement over the 
competitive bid situation where there is no such incentive. 
Such contract language would be presented to the Board 
for review as part of the approval process for the CM-at- 
Risk contract." 

8. Attachment VI, provided by DPW, is a list of public 
sector entities, which are either currently using the CM- 
at-Risk approach or have in the past. 

9. The Budget Analyst notes that DPW has not provided 
an analysis of estimated savings from the use of the CM- 
at-Risk approach. The Budget Analyst also notes that the 
DPW has not provided any documentation on how the 
costs of change orders would be reduced under the CM-at- 
Risk approach as compared to the traditional General 
Contractor approach. 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

23 



City and County of San Francisco 

rs°^?^ Dennis J. Herrera 
City Attorney 




Office of the City Attorney 

Lyndon Y. Chee 
Deputy City Attorney 

Direct Dial: (415)554-3901 

E-Mail: lyndon_chee@ci.sf.ca.us 



MEMORANDUM 
PRIVILEGED & CONFIDENTIAL 



TO: 

FROM: 

DATE: 
RE: 



Harvey Rose, Budget Analyst 

Lyndon Y. CheelA. 
Deputy City Attorney 



December 5, 2002 

File 02-1894: Lagunan Honda Hospital CM-at-Risk procurement 



Your office requested an explanation of how proceeding with a CM-at-Risk contract 
instead of traditional bid-build contracts potentially reduces the City's liability for claims of 
interference by construction contractors at Laguna Honda Hospital. 

As currently planned, construction at Laguna Honda will proceed in phases - different 
structures will be bid and constructed at different times over the duration of the construction 
program. If the City were to proceed with multiple prime contracts for different portions of the 
program 1 , then the City would be responsible for coordinating the work of the various 
contractors. Coordinating the several contractors is further complicated by having the work 
performed in a relatively confined space. In effect, the City would be acting as if it were a 
general contractor coordinating the work of its subcontractors. Under this scenario, the City 
would potentially face delay and disruption claims as one contractor's work interfered with 
another's. 

Under the proposed CM-at-Risk project delivery method, the City will have only one 
construction contract. For a fee, the CM-at-Risk will assume responsibility for managing and 
coordinating all the construction work. Consequently, the CM-at-Risk will be liable for any 
impact that work on one phase may have on another. While the CM-at-Risk does not eliminate 
disruption claims from the program, liability for such claims is shifted to the CM-at-Risk who is 
better able and more experienced in coordinating the subcontractors. 



1 The City could proceed with a single contract to procure construction of all structures. However, this would delay 
the project because a single all-encompassing contract could not be bid until the design of each and every structure 
was complete. A phased program allows the City to bid contracts as the design of discrete components of the 
program are completed. 

Fox Plaza • 1390 Market Street, 6" Floor • San Francisco, Caufornia 941 02-5408 
Reception: (41 5) 554-3800 • Facsimile: (415)255-0733 
24 

n.\conar\os2002\0000754\001d797B.doc 



Attachment EL 
Page 1 of 4 



DECEMBER 2, 2002 



TO: Ms. Sarah Graham 

Budget Analyst's Office 

FROM: Michael Lane 

Laguna Honda Hospital Replacement 

SUBJECT: Description of the Construction Manager-at-Risk Appraoch 

This memo is intended to supplement the earlier report entitled "Report on the Proposal to Use 
the Construction Manager-at-Risk Approach to Building the New Facility, dated November 4, 
2002. 

As requested, this memo will concentrate on: 

1 . Briefly describing the CM-at-Risk approach 

2. Listing the benefits of the CM-at-Risk Approach 

3. Explaining the Guaranteed Maximum Price (GMP), specifically: 

A. How the GMP will be competitive 

B. How the GMP is equivalent to a competitive bid 

1. DESCRIPTION OF THE CONSTRUCTION MANAGER-AT-RISK-APPROACH 

Construction Manager-at-Risk is a term used to describe the following services provided by a 
General Contractor: 

• providing construction management services; 

• bidding all construction work to the trade contractors; 

• holding all contracts with the trade contractors; and 

• guaranteeing the maximum price for the work. 

The Construction Manager-at-Risk approach allows the City to contract with one General 
Contractor (rather than multiple general contractors) and gives that General Contractor the 
authority and responsibility for phasing and packaging of the bids to meet the project's needs. 
Therefore, Construction Manager-at-Risk services are provided by a General Contractor who 
holds subcontracts but may not perform construction work by its own forces. The CM-at-Risk 
performs its work for a Guaranteed Maximum Price. 

The actual CM-at-Risk contract will be submitted separately to the Board of Supervisor's for 
review and approval. 

The approach is summarized below. 

General 

• CM-at-Risk is selected through a public, competitive, qualifications-based process. 

• CM-at-Risk contract will include professional services and subcontracted construction 
work. 



1 2/5/2002 
25 



Attachment II 
Page 2 of 4 

• CM-at-Risk professional services will be performed for a fee to be negotiated by the 
City. 

• CM-at-Risk will not perform construction work with its own forces. All construction work 
is competitively bid to subcontractors. 

• CM-at-Risk holds all contracts with subcontractors and is responsible for their 
performance. 

• City holds one Contract with CM-at-Risk. 

• CM-at-Risk would be required to be bonded, licensed and insured for all services and 
construction work included in the contract. 

• Similar approach to other public and private sector projects. See Appendix H. 

Subcontracting 

• CM-at-Risk, in cooperation with the City and its Architect, will review drawings and 
prepare them for bidding to subcontractors. 

• CM-at-Risk will subcontract all of the construction work. 

• CM-at-Risk will pre-qualify bidders for the major subcontracted trades. 

• CM-at-Risk will qualify at least three bidders for each subcontracted trade. 

• City shall approve the selected bidders for each subcontract. 

• CM-at-Risk will competitively bid subcontracted work, with the possible exception noted 
below. 

• CM-at-Risk will receive bids in a public bid opening. 

• City procedures will be followed in the determining the lowest, responsible, responsive 
bidder. 

• The DPW Director, in consultation with the CM-at-Risk, may negotiate the terms of a 
subcontract with a qualified local disadvantaged business. The total value of 
subcontracts/supply contracts procured under this provision shall not exceed ten 
percent of the value of the CM-at-Risk contract. The DPW Director shall have the sole 
discretion in determining whether to proceed under this provision. 

M/WBE Participation 

• CM-at-Risk contract would increase M/WBE participation for professional services 
performed. This opportunity for increased participation would not be available in the 
current approach to securing a General Contractor for a project of this size. See 
Attachment I. 

• CM-at-Risk contract would include the City's local hiring and M/WBE goals for all 
construction work performed by subcontractors. 

2. BENEFITS OF THE CM-AT-RISK APPROACH 

• CM-at-Risk allows the DPW to best manage this complex project. 

• CM-at-Risk provides the City with a Guaranteed maximum price (GMP) for the work. 

• CM-at-Risk provides for better coordination and control of the work. This results in less 
of an impact to the Laguna Honda Hospital residents and surrounding community and a 
potentially safer project. 



12/5/2002 



Attachment II 
Page 3 of 4 

• CM-at-Risk allows DPW to better manage its exposure to cost overruns due to change 
orders resulting from coordinating multiple contractors simultaneously on site. 

• CM-at-Risk allows a greater participation of M/WBE in professional services contracts. 

THE GUARANTEED MAXIMUM PRICE (GMP) 

The Architect's drawings and specifications will be completed in December 2002 and will 
be used as the basis for determining the scope of work included the CM-at-Risk's 
Guaranteed Maximum Price (GMP). 

The CM-at -Risk will package the work for bidding and at the conclusion of the bidding 
process, the CM-at-Risk will provide a Guaranteed Maximum Price (GMP) for all 
professional services and construction work performed. The GMP shall be within the City's 
budget. 

The estimated budget for the work that would be included in the GMP is $250M. This is 
made up of $221 M for subcontracted work and $29M (13% of the subcontracted work) for 
the general contractor's overhead and fee and also bonds, insurance costs. 

The 13% is an industry standard and has been verified by two independent estimating 
firms. Approximately 11% of the 13% is for professional staff and associated overhead. 
The remaining 2% of the 13% is for bonds and insurance. 

A. How the GMP will be competitive 

The GMP is a combination of the cost of professional management services (11%), 
bonds and insurance (2%) and the cost of construction work performed (87%). 

The CM-at-Risk will provide the management services and the cost of those services 
will be negotiated as is typical for professional services contracts. Cost of services 
should be within industry standards. If not, the City will discontinue negotiations with 
the highest ranked firm and initiate negotiations with the second-highest ranked firm. 

Bonds and insurance costs can be verified based on actuals. 

All construction work will be competitively bid. There is one exception to competitively 
bidding when it appears that the project's goals for local disadvantaged business 
participation are not being met. That exception is limited to a total of 10% of the cost of 
the construction work (8.7% of the overall estimated budget). 

B. How the GMP is equivalent to a competitive bid 

From a financial point of view, assuming local business participation goals are being 
met through the bidding process, the CM-at-Risk is equivalent to a competitive bid 
situation on the construction work. 

The professional services, bonds and insurance costs will be in compliance with 
industry standards. 



12/5/2002 



Attachment II 
Page 4 of 4 

The risk of not being in budget at the conclusion of bidding using the CM-at-Risk 
approach is equivalent to the risk of not being in budget at the conclusion of a 
competitive bid. However, the CM-at-Risk allows for the flexibility to adjust future bid 
packages to adjust to the bidding market and thereby, keep the overall project on 
schedule. 

There are also potential efficiencies in the management of the project inherent in the 
CM-at-Risk approach, which could yield a financial benefit to the project. I have not 
attempted to quantify those efficiencies. 

Finally, the potential for change orders after bid can be mitigated by providing the CM- 
at-Risk with an incentive to minimize the cost of such changes. This would be an 
improvement over the competitive bid situation where there is no such incentive. Such 
contract language would be presented to the Board for review as part of the approval 
process for the CM-at-Risk contract. 



28 12/5/2002 



Attachment III 
Page 1 of 3 



DECEMBER 5, 2002 



TO: Ms. Sarah Graham 

Budget Analyst's Office 



FROM: Michael Lane 

Laguna Honda Hospital Replacement Program 



SUBJECT: Turner Construction Company's Participation in the Construction Manager- 
at-Risk RFP Process & Continue use of CPM for Construction Management 
Services. 



INTRODUCTION 

This memo is intended to supplement the earlier report entitled "Report on the Proposal to Use 
the Construction Manager-at-Risk Approach to Building the New Facility, dated November 4, 
2002. 

As requested, this memo will concentrate on two issues: why the department feels that it is 
appropriate to allow Turner Construction Company to participate in the CM-at-Risk selection 
process and why the department recommends continuing to contract with CPM. 

At the beginning of the Laguna Honda project, the intention was to proceed using the 
traditional design-bid-build approach. This approach is outlined in the November 4, 2002 
report. DPW initiated a public, competitive, Request for Qualifications (RFQ) process to select 
a Construction Manager. 

The joint venture of Turner Construction Company/CPM (Tumer/CPM) was selected in 
January 2001 . The selection process is outlined in Attachment C of the November 4, 2002 
report. 

As detailed in the November 4, 2002 report, the complexity of the project has increased 
significantly as the design has progressed. This lead to the recommendation by DPW to use 
the CM-at-Risk approach, in order to, best manage the project. 

The current Turner Construction Company/CPM contract is a typical professional services 
contract. It does not include construction work or guarantee the price for such work. Upon 
issuance of the CM-at-Risk RFP, the current contract would be modified as follows: 

• Turner Construction Company would be released from the contract in order to allow 
them to compete in the CM-at-Risk RFP process. 

• CPM, the joint venture partner, would be retained to provide expertise that the City 
continues to need in scheduling and contract administration services. 



29 



Attachment m 
Page 2 of 3 

Turner Construction Company's participation in the CM-at-Risk selection process 

The reasons why the department feels that it is appropriate to allow Turner Construction 
Company to participate in the CM-at-Risk selection process are outlined below: 

1 . A year and a half after Turner/CPM was selected, the City is recommending a change to 
the contract delivery method. This was not the City's intent when Turner/CPM 
responded to the City's earlier request for proposals for construction-related 
professional services. 

Therefore, the department felt that it would not be appropriate to prohibit Turner 
Construction Company from participating in the CM-at-Risk process because they 
successfully responded to an earlier request for proposals at a time when there was no 
indication that CM-at-Risk would be the contract delivery method. 

2. In order to ensure a level playing field for other qualified contractors, all available 
information on the site conditions, design, budget, cost estimates, phasing, logistics and 
hospital operations will be made available to all proposers. 

3. The current project team's involvement in the selection process will be limited to 
conducting briefing sessions and site tours with the proposers to review information and 
answer questions. 

4. Adequate time will be allowed for proposers to get familiar with the project. Two months 
is anticipated. 

5. No member of the City's project team or the Architect's team will be on the selection 
panel. As with the previous selection processes, panelists will be chosen based on their 
knowledge of the subject matter, in this case, construction contracting, hospital design, 
construction and operations. Panelists will independently rank proposers based on their 
demonstrated qualifications to perform the work. The interviews, which are taped, will 
be monitored by a representative from the City Attorney's office and the Human Right's 
Commission. 

6. Turner Construction Company is a large General Contracting firm with considerable 
experience in building hospitals. To preclude them from the CM-at-Risk process would 
reduce the competition. 

7. If Turner Construction Company is not selected as the CM-at-Risk, we do not anticipate 
any further involvement by Turner Construction Company in the project. 



30 



Attachment DI 
Page 3 of 3 

Continue use of CPM for Construction Management Services 

To date, the Turner/CPM team and their subconsultants have provided cost estimating, 
logistics planning, construction scheduling, contract administration and inspection services. 
Turner and a WBE firm Powell, have been involved in the cost estimating. This phase of the 
work is actually coming to a close with the completion of the design in December 2002. 

CPM and another MBE firm, BDI are providing the construction scheduling, contract 
administration, some logistics planning and inspection services. The department investigated 
terminating the entire Turner/CPM joint venture contract but decided against recommending it. 
The reasons why the department recommends continuing to contract with CPM are outlined 
below: 

1. CPM was selected through a comprehensive, public, qualifications-based process. The 
details are outlined in the November 4, 2002 report. CPM and its consultants are 
qualified to provide the services needed by the project and to date have performed 
satisfactorily. 

2. The department will continue to need the services of a construction management firm, 
which needs to be independent of the CM-at- Risk. 

3. There would be a discontinuity in service of three to four months if the department went 
through a selection process for a replacement construction management firm. This 
would be separate from the CM-at-Risk selection process. During that period the 
services mentioned above would not be available to the project. 

4. The discontinuity in service would impact the project in a number of areas: 

■ Scheduling: Updated construction schedules are provided by CPM. The absence of 
the schedule would impact project planning specifically preparation for upcoming 
work and refinement of cash flow and encumbrance schedules necessary for the 
first General Obligation bond sale planned in the first half of 2003. 

■ Contract Administration/Logistics Planning: Work on utility relocations has begun 
and is being coordinated by a DBI staff member. A discontinuity in this service could 
impact the schedule for this project. 

■ Inspection: CPM is providing a state-required Inspector of Record (IOR). The State 
will not allow work to proceed without an IOR on site. Again, a discontinuity in this 
service could impact the schedule for this project. 

5. To address the concerns about CPM's ability to meet other needs of the project in the 
long term, the Director has requested the authorization to evaluate the CPM team as 
the needs of the project change and determine if the team needs to be supplemented. 



I hope that this information is helpful. If you have any questions or comments please call me 
at 759-4595. 



31 



Attachment IV 



Turner 



Turner Construction Company 
1625 Clay Street 
Oakland. CA 94612-1531 
phone: 510.267.8100 
fax: 510.267.0787 



December 5, 2002 



Ms. Sarah Graham 

Budget Analyst's Office 

City and County of San Francisco 

1390 Market Street, Suite 1025 

San Francisco, CA 94102 

SUBJECT: Participation in the Construction Manager-at-Risk RFP Process 

Dear Ms. Graham: 

This is to confirm that Turner Construction Company is agreeable to being released from its 
current contract with the City and County of San Francisco for Construction Management 
services on the Laguna Honda Replacement Hospital. This is agreeable with the understanding 
that the City will have a selection process for CM-at-Risk and will allow Turner to compete for the 
proposed CM-at-Risk contract with the potential of being awarded the CM-at-Risk contract. 

It is further understood and agreeable to Turner Construction Company, that we do not 
anticipate any further involvement in the project if we are not successful in the competition for 
the CM-at-Risk contract 

If you have any questions or comments, please call me at 510.267.8190. 

Very truly yours, 



Michael E. O'Brien 

Vice President, General Manager 

cc: Mike O'Brien, Turner Construction Company 
Ismael Pugeda, CPM 

George Wong/Lyndon Chee, City Attorney's Office 
Michael Lane, City & County of San Francisco 



A Century o f Excellence 

32 



Attachment V 



PROJECT BUDGET INFORMATION 



EXPENDITURES 



CONSTRUCTION: 






CM-at-Risk Subcontractors: 


$22 1M 




CM-at-Risk 


$ 29M 




Other Construction: 


$ 40M 




SUBTOTAL 




S290M 


CONSTRUCTION CONTINGENCY: 




S21.6M 


PROFESSIONAL SERVICES: 






Design Services 


S36.5M* 




CM Services 


S15.5M 




Testing & Permits 


S13.5M 




Program Management 


$ 8.0M 




Activation Costs 


$ 1.5M 




SUBTOTAL 




$75M 


ASSISTED LIVING MATCHING FUNDS 




$15M 



TOTAL PROJECT BUDGET S401.6M 

SOURCES OF FUNDS 

GENERAL OBLIGATION BONDS S299M 

TOBACCO SETTLEMENT FUNDS $ 1 00M 

INTEREST EARNTNGS S 2.6M 

TOTAL SOURCES $401. 6M 

* Includes the $29. 9M contract with Anshen+Allen / Gordon H. Chong & Partners 



33 



Attachment . VI 

ATTACHMENT H 
The CM at Risk approach is quite common in the private sector with companies such as HP 
and Intel using it to deliver their projects. Use of this Approach in the public sector in 
becoming more common. A list of some jurisdictions that are using the approach is shown 
below: 



Project 


Vol. 


Building 


Compl. 


Client 




(in $ mil) 


Type 


Date 




San Jose City Hall 


$190M 


City Hall 


2004 


City of San Jose 


County of San Mateo 


75 


Detention 


2004 


County of San Mateo 


* J. V. Hall 


16 


Center 


1998 


County of San Mateo 


* Admin. Bldg. 


12 


Admin. Bldg. 


2002 


County of San Mateo 


* Crime Lab 




Laboratory 








15 




1996 


Redwood City 


Redwood City Hall 




City Hall 








5 


Building 


2003 


Ravenswood Sch. 


Ravenswood School 








Distr. 




15 


School 


2002 




Saratoga Union 








Saratoga Union Sch. 


Schools 


10 


School 


2000 


Distr. 


Woodside Elem. 


60 


School 


2002 


Woodside School 


School Distr. 




School 




Distr. 


Redwood City School 


40 




1999 


Redwood City Sch. 


Distr. 








Distr. 




15 


City Hall 


2002 




City of Hayward 




Building 








12 




On 


City of Hayward 


El Camino Hospital 




Hospital 


Hold 


El Camino Hospital 


Cabrillo Community 




College 






College 


10 




2003 


Cabrillo College 


Palo Alto Unified 










Schoool Distr 


42 


School 


1997 


Palo Alto Sch. Distr. 


Watsonville Hospital 


20 


Hospital 


2004 




City of San Mateo 


60 


Office 


1999 


Watsonville Hospital 


San Joaquin General 








City of San Mateo 


Hospital 




Hospital 




San Joaquin Hospital 



34 



11/4/2002 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

Item 6 - File 02-1504 



Item: 



Description: 



Ordinance adding Section 21.25-2 to the Administrative 
Code to require that employees of City contractors, who 
are employed in City-owned or leased off-street parking 
lots, garages, and storage facilities where vehicles are 
stored, (a) be paid the prevailing rate of wages and (b) 
that such employees will have job protection with the 
successor contractor for a transition period after a City 
lease, management agreement or other contractual 
arrangement is terminated. 

The proposed ordinance would amend the Administrative 
Code to: 

• Require that employees 1 of City contractors, who work 
at City-owned or leased off-street parking lots, 
garages, or facilities where vehicles are stored, be paid 
the prevailing rate of wages, including fringe benefits. 

• Require that in the event of a termination of a lease, 
management agreement or other contractual 
arrangement with the City for the operation of off- 
street parking lots, garages, or storage facilities where 
vehicles are stored (a) existing employees 2 of City 
contractors operating the facility be given a 90-day 
transition employment period, (b) existing employees 
of City contractors receive a written performance 
evaluation from the successor Contractor at the end of 
the 90-day transition employment period, and (c) if the 
performance is satisfactory, employees be retained by 
the successor Contractor under the terms and 
conditions established by the new Contractor. 

• Establish penalties for noncompliance with the 
prevailing wage provisions of the subject ordinance, 



1 In order to qualify for the prevailing wage provision of the subject ordinance, employees must 
perform work in one of the following classifications: washing, polishing, lubrication, rent-car service, 
parking vehicles, cashiers, attendants, checking coin boxes, non-attendant parking lot checking, 
daily ticket audits, traffic directors, shuttle drivers, and all other incidental duties, which are 
generally considered to be the duties of Garage Attendants. Further, the employees must have, as 
their primary place of employment, a public off-street parking lot, garage, or storage facility for 
vehicles, and may not be managerial, supervisory, or confidential employees. 

2 In order to qualify for the 90 day transition period, evaluation and retention provisions of the 
subject ordinance, employees of City contractors must work at least 15 hours per week, must have 
been employed for the preceding twelve months or longer at the site or sites covered by the lease, 
management agreement, or other contractual arrangement providing that just cause does not exist 
to terminate the employee(s). 



35 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

such that if the Contracting Officer 3 suspects a 
possible violation of the prevailing wage provision, the 
Contracting Office shall (1) send written notice to the 
Contractor and (2) may terminate the agreement 
between the City and the Contractor for 
noncompliance. Where the Contracting Officer finds 
that the Contractor has willfully violated 4 the 
requirements, the Contracting Officer may charge a 
penalty in an amount of $50.00 per day for each 
employee that the Contractor failed to pay the 
Prevailing Rate of Wage. The proposed subject 
ordinance specifies that penalty funds would be 
deposited to the account that funded the lease, 
management agreement, or other contractual 
arrangement. 
• Establishes a remedy for noncompliance with the 90- 
day transition employment period and termination 
reqiiirements such that if an employee of a City 
contractor has been discharged in violation of the 
subject ordinance, the employee may bring action in 
the Superior Court of the State of California and 
where applicable, the employee shall be awarded back 
pay, including the value of benefits. If the employee is 
the prevailing party, the subject proposed ordinance 
directs the Court to award reasonable attorney's fees 
and costs. 

The proposed legislation also contains a policy statement 
urging all public entities with boundaries similar or the 
same as the City, such as the Parking Authority, to adopt 
the prevailing wage and employee transition period policy 
of the proposed subject ordinance. 

Comments: 1. According to Ms. Molly Stump of the City Attorney's 

Office, in March of 1989, the Board of Supervisors 
amended Chapter 6 of the City's Administrative Code to 
include the operation of off-street parking lots or garages 
under the term "public work or improvements" as defined 



3 The subject ordinance defines Contracting Officer as any officer or employee of the City and County 
of San Francisco authorized to enter into a Lease, Management Agreement, or Other Contractual 
Arrangement for the operation of a public off-street parking lot, garage, or storage facility for 
vehicles on property owned or leased by the City. 

4 The proposed subject ordinance does not define the term "willful violation". According to Mr. Tom 
Lakritz of the City Attorney's Office, to establish a "willful violation", the Contracting Officer must 
document the violation and have evidence that the violation was purposeful. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

36 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



by Section 6.33 to require the payment of the highest rate 
of prevailing wage to Garage Attendants who are 
employees of City contractors operating City-owned 
garage facilities. Ms. Stump notes that in 1999, the 
Board of Supervisors amended Chapter 6 and deleted 
references to employees working in off-street parking lots 
and garages owned or leased by the City, thereby deleting 
the requirement that Garage Attendant employees of City 
contractors be paid the highest rate of prevailing wage. 

According to Mr. Tom Lakritz of the City Attorney's 
Office, in September of 2002 the term "highest rate of 
prevailing wage" was changed in the Administrative 
Code, Section 6.22 by the Board of Supervisors to 
"prevailing rate of wages". Mr. Lakritz states that the 
subject ordinance has used the term "prevailing rate of 
wages" to be consistent with Section 6.22. 

2. Mr. Lakritz and Ms. Donna Levitt of the Office of 
Labor Standards Enforcement state that they have not 
determined the number of leases, contracts, and 
management agreements that the subject ordinance 
would apply to or the number of City departments that 
would be responsible for including the above listed 
provisions in their leases, contracts, and management 
agreements. Ms. Levitt notes that 40 City-owned off- 
street parking lots and garages are under the jurisdiction 
of the Department of Parking and Traffic (DPT). 

According to Mr. Lakritz, the proposed ordinance would 
only apply to agreements executed subsequent to the 
approval of the proposed ordinance. Mr. Lakritz notes 
that employees of City contractors covered by the subject 
ordinance would include persons performing work in the 
following classifications - washing, polishing, lubrication, 
rent-car service, parking vehicles, cashiers, attendants, 
checking coin boxes, non-attendant parking lot checking, 
daily ticket audits, traffic directors, shuttle drivers, and 
all other incidental duties, which are generally considered 
to be the duties of Garage Attendants. Mr. Lakritz notes 
that the proposed ordinance would not apply to employees 
of the City, but rather to employees of private firms that 
contract with the City. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

37 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

3. While the proposed ordinance would cover only new 
and not existing contracts, according to Mr. Ron Szeto of 
the Department of Parking and Traffic (DPT), since 1989, 
DPT has required through their contracts that all City 
parking management firm contractors pay their Garage 
Attendant employees the prevailing rate of wage, as 
determined by the Civil Service Commission. Mr. Szeto 
states that 41 City-owned parking facilities, including 21 
off street parking lots, 19 garages, and 1 storage facility 
where vehicles are stored are under the jurisdiction of 
DPT and the Parking Authority. Mr. Szeto advises that 
19 of the 41 facilities are attended parking garages. 
According to Mr. Szeto, all 19 attended City-owned 
parking garages require the City contractors operating 
such facilities to pay the prevailing rate of wage to their 
approximately 200 Garage Attendant employees. 

According to Mr. Szeto, DPT has recently also included, in 
their contract provisions, change of management 
protection provisions for Garage Attendants. 5 Mr. Szeto 
notes that including the 90-day transition period, 
evaluation and retention provisions that the subject 
ordinance would establish in its agreements with City 
contractors would not add costs to the DPT because these 
provisions are similar to the Department's current 
practice. 

According to Mr. Fred Hamdum of DPT, the one storage 
facility where vehicles are stored under the jurisdiction of 
DPT is operated by City Tow. The City's contract with 
City Tow presently does not provide either for the 
payment of prevailing wages or for an employment 
transition period to employees of City Tow. 

4. "Prevailing wage" for the purpose of the subject 
proposed ordinance is the rate of compensation, including 
fringe benefits or the matching equivalents thereof, being 



5 Mr. Szeto states that generally DPT allows only a 25% change in the City contractor's personnel in 
the event of a change of contractors. Mr. Szeto states that if City contractor Garage Attendant 
employees have worked for the City contractor at the facility for 12 months prior to the 
commencement of a new contract, employees must be retained for 90-days from the commencement 
of the new contract. Such Garage Attendants are subject to a 90-day evaluation period and may be 
released only with just cause. If retained by the new parking contractor, Garage Attendants retain 
all financial rights accumulated through their service with the previous City contractor that 
employed them. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

38 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

paid to a majority of workers engaged in the area in which 
the lease, management agreement, or other contractual 
arrangement is being performed in the City and County of 
San Francisco. The subject proposed ordinance states 
that the Civil Service Commission is required to furnish 
to the Board of Supervisors, within 60 days after the 
effective date of the proposed subject ordinance, data as to 
the prevailing rate of wages for individuals working in off- 
street parking lots, garages, and storage facilities where 
vehicles are stored, and that the Board of Supervisors 
must then fix these wages. According to Mr. Lakritz, the 
fixing of such rates by the Board of Supervisors would be 
the subject of future legislation. 

5. The proposed ordinance establishes that the 
Contracting Officer would be responsible for enforcing the 
prevailing wage provisions and for assessing penalties for 
noncompliance. According to Ms. Levitt, the Office of 
Labor Standards Enforcement, a Division of the Office of 
Contract Administration, would be responsible for the 
enforcement of the subject ordinance. As noted in the 
attached memorandum from Ms. Levitt, the Office of 
Labor Standards Enforcement would respond to 
complaints, conduct investigations as needed, conduct 
random audits, and make recommendations to 
Contracting Officers. As noted in the Attachment, Ms. 
Levitt reports that the proposed ordinance would require 
an additional 0.5 FTE Contract Compliance Officer I. 
With mandatory fringe benefits, the cost of this new 0.5 
FTE position would range from $36, 700 to $44,614. Ms. 
Levitt states that if the proposed ordinance is approved, 
the Office of Contract Administration would submit a 
supplemental appropriation to fund the new position for 
six months starting January 1, 2003. As noted in the 
Attachment, Ms. Levitt estimates that the revenues 
generated from penalties collected for labor standards 
violations would offset the cost of the new position. 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

39 



City and County of San Francisco Office of Contract Administration 

-jgcouj^ Judith A. Blackwell, Director 

Willie Lewis Brown, Jr. 

Mayor Office of Labor Standards Enforcement 

Donna 
lanager 




MEMORANDUM 



To: Budget Analyst 

Attn: Elaine Forbes 

From: Donna Levitt 

Re: Garage Attendants Prevailing Wage 

Date: October 23, 2002 

Cc: Judith Blackwell 



The Office of Contract Administration, through its Office of Labor Standards Enforcement 
division, will be responsible for the enforcement of the subject ordinance by conducting random 
audits, responding to complaints, conducting investigations as needed, and making 
recommendations to contracting officers. The need for additional staff is estimated to be 0.5 
FTE Contract Compliance Officer I. The annual salary range for CCO I is $60,164 - $73,138. 
Including fringe benefits, the cost of the new 0.5 FTE position will range from $36,700 to 
$44,614. The cost of this position will be offset by revenue generated to the General Fund from 
penalties collected for labor standards violations. We plan to apply for a supplemental 
appropriation to fund the position for six months starting 1/1/03. 



City Hall, Room 430 1 Dr. Carlton B. Goodlett Place Tel. (415) 554-6235 Fax (415) 554-6291 San Francisco CA 94102-46 

40 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



Item 7 - File 02-1920 

Department: 

Item: 



Description: 



Mayor's Office of Housing (MOH) 

Resolution approving amendments to Criteria and 
Procedures for Allocating Home Investment Partnership 
(HOME) Program Funds. 

Title II of the National Affordable Housing Act of 1990 
authorized the HOME Program, which provides funds for 
the acquisition, rehabilitation, and development of 
privately owned affordable housing. Each year, the Federal 
Department of Housing and Urban Development (HUD) 
provides a HOME grant to San Francisco for affordable 
housing programs, which is administered by the Mayor's 
Office of Housing (MOH). 

The Board of Supervisors approved (a) procedures for 
allocating HOME Program funds in August of 1992 
(Resolution 679-92) and (b) revisions to the procedures in 
February of 1994 (Resolution 143-94). These procedures 
outline broad criteria and the process for allocating the 
HOME Program funds, including (a) notification procedures 
to interested parties on the availability of housing funds, 
(b) evaluation of funding proposals, including eligibility 
criteria and ranking of proposals, and (c) terms of HOME 
funding agreements. 

The proposed resolution would amend the Criteria and 
Procedures for Allocating HOME Program Funds to: 

• Require that the Annual Report, which is submitted by 
MOH to the Board of Supervisors, be based on the 
previous fiscal year rather than the previous calendar 
year. Currently, MOH submits an Annual Report to the 
Board of Supervisors by March 31 of each year for the 
preceding calendar year, providing an accounting of all 
HOME program funds received by the City and how the 
funds were expended. Under the proposed resolution, 
the Annual Report must be submitted by the Mayor's 
Office of Housing by September 30 of each year for the 
preceding fiscal year. 



Board of Supervisors 
Budget Analyst 

41 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



• Clarify that for-profit developers are eligible to apply for 
HOME funds (see Comment 1). 

• Make HOME loan terms compatible with Low-Income 
Housing Tax Credit requirements, including reducing 
the term of certain loans from 75 years to 55 years (see 
Comment 2). 

• Reflect current program names and policies, including: 

(a) deleting references to the "Rehabilitation Matching 
Fund" program and adding references to the "Home 
Ownership Assistance Program"; 

(b) deleting references to the "Comprehensive Housing 
Affordability Strategy" and adding "Consolidated 
Plan", and 

(c) deleting references to the "Residence Element" of the 
Master Plan and adding "Housing Element". 

• Add references regarding MOH Underwriting 
Guidelines, as follows: 

(a) The Notice of Funding Availability will state that 
MOH Underwriting Guidelines will be used to 
compare proposals to industry standards; 

(b) Proposals will be evaluated for meeting Minimum 
Eligibility Requirements and MOH Underwriting 
Guidelines; and 

(c) Proposals will be ranked after determining that the 
proposals meet Minimum Eligibility Requirements 
and MOH Underwriting Guidelines. 

Comments: 1. Currently, the Criteria and Procedures for Allocating 

HOME Program Funds states that the Loan Committee 
"shall review and recommend approval or denial of all 
applications for HOME Program funds by non-profit 
sponsors". Under the proposed resolution, the word non- 
profit would be deleted, clarifying that for-profit project 
sponsors would be eligible to apply for HOME loans. 
According to Ms. Alicia Klein of MOH, the Federal HUD 
regulations permit for-profit project sponsors to apply for 
loans, and therefore, the proposed amendment to allow for- 
profit project sponsors to apply for HOME loans would be 
consistent with Federal HUD regulations. 



Board of Supervisors 

Budget Analyst 

42 






Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



Recommendation: 



2. Under the existing Criteria and Procedures for Allocating 
HOME Program Funds, the term of affordability for rental 
projects is 75 years. Therefore, if a project sponsor receives 
a HOME loan to develop affordable rental housing, the loan 
would have a term of 75 years, during which time the 
housing development must provide affordable rental 
housing to low-income households. However, under the 
proposed resolution, a project sponsor may receive a HOME 
loan to develop affordable rental housing for a term of 55 
years. Therefore, the project sponsor would be required to 
provide affordable rental housing to low-income households 
for 55 years rather than 75 years. Under the proposed 
Criteria and Procedures for Allocating HOME Program 
Funds, the Mayor may approve an affordable rental housing 
project for a term of 55 years if the shorter term is necessary 
for the HOME loan to be used to leverage other financing to 
develop the project. 

3. According to Ms. Klein, under Federal Internal Revenue 
Service regulations, non profit developers can form limited 
partnerships with tax investors, in which the tax investor 
provides private financing for the affordable housing 
development and receives a Federal Low Income Housing 
Tax Credit. Ms. Klein advises that the proposed 55-year 
term of affordability would bring the Criteria and 
Procedures for Allocating HOME Program Funds into 
conformity with Federal Internal Revenue Service 
regulations. 

Approval of the proposed resolution is a policy matter for the 
Board of Supervisors. 



Board of Supervisors 

Budget Analyst 

43 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



Item 8 - File 02-1974 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Public Utilities Commission (PUC) 

Resolution (a) approving the issuance of not to exceed 
$485,000,000 aggregate principal amount of Clean Water 
Revenue Bonds, 2003 Refunding Series A to be issued by 
the Pub he Utilities Commission of the City and County of 
San Francisco; and (b) authorizing the taking of 
appropriate actions in connection therewith and related 
matters. 

Not to exceed $485,000,000 

Clean Water Revenue Bonds, 2003 Refunding Series A 

The proposed resolution would authorize the Pubhc 
Utilities Commission to issue an amount not to exceed 
$485,000,000 in tax-exempt Clean Water Revenue Bonds, 
2003 Refunding Series A, to refund Clean Water Revenue 
Bonds, Series 1992, Series 1994, Series 1995A, and Series 
1995B. 

The Public Utilities Commission (PUC) has issued 
$561,497,147 in Clean Water Revenue Bonds, Series 
1992, Series 1994, Series 1995A, and Series 1995B, of 
which $400,945,000 is outstanding. These Clean Water 
Revenue Bonds financed capital improvements to the 
City's sewer system facilities or refinanced prior revenue 
bonds. 

The proposed refunding Bonds will refund all of the 
$400,945,000 in outstanding Series 1992, Series 1994, 
Series 1995A, and Series 1995B Clean Water Revenue 
Bonds. Pursuant to Charter Section 9.109, the Board of 
Supervisors is authorized to approve the issuance of 
Revenue Refunding Bonds, if such Bonds are expected to 
result in net debt service savings to the City on a present 
value basis. According to Ms. Karol Ostberg of the PUC, 
issuance of the proposed Clean Water Revenue Bonds, 
2003 Refunding Series A, which will retire the Clean 
Water Revenue Bonds, Series 1992, Series 1994, Series 
1995A, and Series 1995B, will result in total estimated 
net present value savings in aggregate debt service of 
Board of Supervisors 
Budget Analyst 
44 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



$32,522,071 (see Attachment II, provided by the PUC and 
Comment 5). 

Comments: 1. According to Ms. Ostberg, the Clean Water Revenue 

Bonds, 2003 Refunding Series A will be repaid from the 
net revenues of the Clean Water Enterprise and will not 
require General Fund monies to repay the proposed 
Bonds. 

2. Ms. Ostberg states that the estimated amount needed 
of the proposed Clean Water Revenue Bonds, 2003 
Refunding Series A is $420,600,000. According to Ms. 
Ostberg, the subject Bond proceeds will be used to (a) pay 
the underwriters' fee, (b) pay other costs of bond issuance 
including attorney, rating agencies and printing fees, (c) 
pay the bond insurance premium, (d) fund the required 
debt service reserve, and (e) refund or retire Clean Water 
Revenue Bonds, Series 1992, Series 1994, Series 1995A 
and Series 1995B, as shown in Attachment I. 

3. According to Ms. Ostberg, the PUC proposes to issue 
the Clean Water Revenue Bonds, 2003 Refunding Series 
A Bonds on January 28, 2003, and Bond proceeds will be 
used to repay Clean Water Revenue Bonds, Series 1992, 
Series 1994, Series 1995A and Series 1995B as follows: 

• The existing Series 1992 Bonds are expected to be 
refunded on March 1, 2003. The Series 1992 Bonds 
have interest rates between 5.5 percent and 6.0 
percent, and were issued with a 23-year term, with a 
final payment date on October 1, 2015. 

• The existing Series 1994 Bonds are expected to be 
refunded on March 1, 2003. The Series 1994 Bonds 
have interest rates between 4.7 percent and 5.375 
percent and were issued with a 28-year term, with a 
final payment date on October 1, 2022. 

• The existing Series 1995A Bonds are expected to be 
refunded on October 1, 2003. The Series 1995A Bonds 
have interest rates between 5.375 percent and 5.95 
percent and were issued with a 30-year term, with a 
final payment date on October 1, 2025. 



Board of Supervisors 
Budget Analyst 

. 45 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



• The existing Series 1995B Bonds are Capital 
Appreciation Bonds 1 and were issued with five 
separate final payment dates on October 1, 2006, 
October 1, 2007, October 1, 2008, October 1, 2009, and 
October 1, 2010. Proceeds from the proposed Clean 
Water Revenue Bonds, 2003 Refunding Series A will 
be deposited into an interest bearing escrow account, 
and will be used to refund the Series 1995B Capital 
Appreciation Bonds on each of the five separate final 
payment dates. 

4. Attachment III, provided by Bill Berry, Assistant 
General Manager of the PUC, further clarifies the Clean 
Water Enterprise Refunding matter. 

5. Ms. Ostberg states that the interest rates for the 
proposed Clean Water Revenue Bonds, 2003 Refunding 
Series A are estimated to range from 2.2 percent to 4.9 
percent and would have a 23-year term with the final 
payment on January 1, 2026. As previously noted, the 
proposed refunding of the Clean Water Revenue Bonds, 
Series 1992, Series 1994, Series 1995A and Series 1995B 
at interest rates ranging from 2.2 percent to 4.9 percent 
will result in an estimated total net present value savings 
of $32,522,071, which equals approximately 8.1 percent of 
the $400,945,000 in outstanding Clean Water Revenue 
Bonds, Series 1992, Series 1994, Series 1995A and Series 
1995B. Attachment II, provided by PUC, is a debt service 
comparison between the Clean Water Revenue Bonds, 
Series 1992, Series 1994, Series 1995A and Series 1995B 
and the proposed Clean Water Revenue Bonds, 2003 
Refunding Series A, which shows estimated net present 
value savings of $32,522,071. 

6. Ms. Ostberg notes that the exact amount of the 
proposed Clean Water Revenue Bonds, 2003 Refunding 
Series A, in an amount not to exceed $485,000,000, will 
not be known until the date of the sale of the subject 
Bonds. The actual aggregate principal amount needed to 
refund the Clean Water Revenue Bonds, Series 1992, 



1 Capital Appreciation Bonds (CAB) accrete in value rather than accrue interest. Therefore, a CAB 
is purchased at a discounted value from the face value and redeemed at face value. The CAB can not 
be redeemed prior to the maturity date. 

Board of Supervisors 
Budget Analyst 

46 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



Series 1994, Series 1995A and Series 1995B and 
associated issuance costs depends on the interest rate 
that will be in effect on that date of the sale of the subject 
Bonds. The proposed resolution would authorize the PUC 
to issue Cleans Water Revenue Bonds, Refunding Series 
2003 A in an amount not to exceed $485,000,000. This 
amount of $485,000,000 is $64,400,000 or 15.3 percent 
more than the estimated amount needed of $420,600,000. 
The Budget Analyst recommends that the resolution be 
amended to reduce the authorized not to exceed amount of 
$485,000,000 by $22,340,000, to $462,660,000, which 
would still provide a 10 percent contingency over the 
present anticipated needed amount of $420,600,000. 

7. As noted in Comment 5, the estimated total net 
present value savings of $32,522,071 is approximately 8.1 
percent of the $400,945,000 in outstanding Clean Water 
Revenue Bonds, Series 1992, Series 1994, Series 1995A 
and Series 1995B. According to Ms. Ostberg, it is a 
standard industry practice that issuance of refunding 
bonds should result in a debt service savings of at least 3 
percent of the bonds to be refunded. Although the 
estimated 8.1 percent more than covers the 3 percent 
industry standard, in order to ensure debt service savings 
of at least 3 percent, the Budget Analyst recommends that 
the proposed resolution be amended by adding the 
following provision: 

"Further provided, that issuance of the Clean 
Water Revenue Bonds, 2003 Refunding Series A 
would result in net debt service savings to the City 
on a present value basis of at least 3 percent, or 
$12,028,350, of the refunded amount of 
$400,945,000, which is the outstanding balance of 
the Clean Water Revenue Bonds, Series 1992, 
Series 1994, Series 1995A and Series 1995B to be 
refunded." 

Recommendations: 1. In accordance with Comment 6, amend the proposed 

resolution to reduce the authorized not to exceed 
$485,000,000 aggregate principal amount of Clean Water 
Revenue Bonds, 2003 Refunding Series A by $22,340,000 
to $462,660,000, which would still provide $42,060,000, or 

Board of Supervisors 
Budget Analyst 

47 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



10 percent more than the estimated needed amount of 
$420,600,000. 

2. In accordance with Comment 7, amend the proposed 
resolution to require that issuance of the Clean Water 
Revenue Bonds, Refunding Series 2003 A would result in 
net debt service savings to the City on a present value 
basis of at least 3 percent, or $12,028,350, of the refunded 
amount of $400,945,000, which is the outstanding 
balance of the Clean Water Revenue Bonds, Series 1992, 
Series 1994, Series 1995A and Series 1995B to be 
refunded. 

3. Approve the resolution as amended. 



Board of Supervisors 

Budget Analyst 

48 



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49 



Attachment 1 1 
Page 1 of i 



$420,600,000 

City and County of San Francisco 

Sewer Revenue Bonds, Series 2003 

Scenario 4 

DEBT SERVICE COMPARISON 



Date 



Net New D/S 



Savings FISCAL TOTAL 



1/28/2003 
4/01/2003 
6/30/2003 
7/01/2003 

10/01/2003 
1/01/2004 
4/01/2004 
6/30/2004 
7/01/2004 

10/01/2004 
1/01/2005 
4/01/2005 
6/30/2005 
7/01/2005 

10/01/2005 
1/01/2006 
4/01/2006 
6/30/2006 
7/01/2006 

10/01/2006 
1/01/2007 
4/01/2007 
6/30/2007 
7/01/2007 

10/01/2007 
1/01/2008 
4/01/2008 
6/30/2008 
7/01/2008 

10/01/2008 
1/01/2009 
4/01/2009 
6/30/2009 
7/01/2009 

10/01/2009 
1/01/2010 
4/01/2010 
6/30/2010 
7/01/2010 

10/01/2010 
1/01/2011 
4/01/2011 
6/30/2011 
7/01/2011 
10/01/2011 
1/01/2012 
4/01/2012 



10,160,080.96 10,160,080.96 



6,454,136.27 
7,593,101.50 

7,593,101.50 
7,593,101.50 

7,593,101.50 
7,593,101.50 

7,593,101.50 
43,558,101.50 

7,192,091.75 
44,017,091.75 

6,717,049.25 
44,602,049.25 

6,171,505.25 
45,211,505.25 

5,570,289.25 
33,700,289.25 

5,097,705.25 
29,487,705.25 



(580,004.03) 
(683,425.51) 

(683,425.51) 
(683,425.51) 

(683,425.51) 
(683,425.51) 

(683,425.51) 
(683,425.51) 

(683,425.51) 
(683,425.51) 

(683,425.51) 
(683,425.51) 

(6S3,425.51) 
(683,425.51) 

(683,425.51) 
(683,425.51) 

(683,425.51) 
(683,425.51) 



5,874,132.24 
6,909,675.99 

6,909,675.99 
6,909,675.99 

6,909,675.99 
6,909,675.99 

6,909,675.99 
42,874,675.99 

6,508,666.24 
43,333,666.24 

6,033,623.74 
43,918,623.74 

5,488,079.74 
44,528,079.74 

4,886,863.74 
33,016,863.74 

4,414,279.74 

28,804,279.74 



30,575,080.96 
9,611,332.21 

25,621,332.21 
9,180,572.21 

9,180,572.21 
9,180,572.21 

38,170,572.21 
8,508,776.59 

38,953,776.59 
7,784,168.46 

39,839,168.46 
7,010,575.96 

40,740,575.96 
6,173,693.46 

29,143,693.46 
5,658,132.21 

25,013,132.21 
5,107,482.21 



(5,874,132.24) 

30,575,080.96 

(6,909,675.99) 

9,611,332.21 

(6,909,675.99) 

25,621,332.21 

(6,909,675.99) 

9,180,572.21 

(6,909,675.99) 
9,180,572.21 

(6,909,675.99) 
9,180,572.21 

(6,909,675.99) 

38,170,572.21 

(42,874,675.99) 

8,508,776.59 

(6,508,666.24) 

38,953,776.59 

(43,333,666.24) 

7,784,168.46 

(6,033,623.74) 

39,839,168.46 

(43,918,623.74) 

7,010,575.96 

(5,488,079.74) 

40,740,575.96 

(44,528,079.74) 

6,173,693.46 

(4,886,863.74) 

29,143,693.46 

(33,016,863.74) 

5,658,132.21 

(4,414,279.74) 

25,013,132.21 

(28,804,279.74) 

5,107,482.21 



10,160,080.96 



27,402,604.94 



20,982,552.44 



4,541,792.44 



(3,105,003.18) 



(3,104,387.43) 



(3,102,503.06) 



(3,101,890.06) 



(3,101,901.81) 



Montague DeRose and Associates 
Public Finance 



File = SAN FRAN PUC V09.SF-2003 Sewer Refunding (Restructure vla)-Issue Summary 

11/26/2002 1:01 PM 



Page 3 



50 



Attac hment I I 
Page Z of 3 



$420,600,000 

City and County of San Francisco 

Sewer Revenue Bonds, Series 2003 

Scenario 4 

DEBT SERVICE COMPARISON 



Date 



Total P+I 



DSR Net New D/S 



Savings FISCAL TOTAL 



6/30/2012 
7/01/2012 

10/01/2012 
1/01/2013 
4/01/2013 
6/30/2013 
7/01/2013 

10/01/2013 
1/01/2014 
4/01/2014 
6/30/2014 
7/01/2014 

10/01/2014 
1/01/2015 
4/01/2015 
6/30/2015 
7/01/2015 

10/01/2015 
1/01/2016 
4/01/2016 
6/30/2016 
7/01/2016 

10/01/2016 
1/01/2017 
4/01/2017 
6/30/2017 
7/01/2017 

10/01/2017 
1/01/2018 
4/01/2018 
6/30/2018 
7/01/2018 

10/01/2018 
1/01/2019 
4/01/2019 
6/30/2019 
7/01/2019 

10/01/2019 
1/01/2020 
4/01/2020 
6/30/2020 
7/01/2020 

10/01/2020 
1/01/2021 
4/01/2021 
6/30/2021 
7/01/2021 



4,667,221.75 (683,425.51) 3,983,796.24 

29,997,221.75 (683,425.51) 29,313,796.24 

4,201,149.75 (683,425.51) 3,517,724.24 

30,581,149.75 (683,425.51) 29,897,724.24 

3,695,972.75 (683,425.51) 3,012,547.24 

31,205,972.75 (683,425.51) 30,522,547.24 

3,145,772.75 (683,425.51) 2,462,347.24 

31,885,772.75 (15,062,086.64) 16,823,686.11 

2,549,417.75 (381,473.63) 2,167,944.12 

15,209,417.75 (381,473.63) 14,827,944.12 

2,278,493.75 (381,473.63) 1,897,020.12 

15,538,493.75 (381,473.63) 15,157,020.12 

1,988,099.75 (381,473.63) 1,606,626.12 

15,898,099.75 (381,473.63) 15,516,626.12 

1,676,515.75 (381,473.63) 1,295,042.12 

16,291,515.75 (381,473.63) 15,910,042.12 

1,341,832.25 (381,473.63) 960,358.62 

16,701,832.25 (381,473.63) 16,320,358.62 

982,408.25 (381,473.63) 600,934.62 



25,647,482.21 
4,548,662.21 

26,358,662.21 
3,954,894.71 

27,109,894.71 
3,320,776.58 

27,915,776.58 
2,647,232.83 

14,487,232.83 
2,324,176.58 

14,889,176.58 
1,981,360.33 

15,321,360.33 
1,617,414.08 

15,787,414.08 
1,230,846.58 

16,275,846.58 
820,435.33 



(3,983,796.24) 

25,647,482.21 

(29,313,796.24) 

4,548,662.21 

(3,517,724.24) 

26,358,662.21 

(29,897,724.24) 

3,954,894.71 

(3,012,547.24) 

27,109,894.71 

(30,522,547.24) 

3,320,776.58 

(2,462,347.24) 

27,915,776.58 

(16,823,686.11) 

2,647,232.83 

(2,167,944.12) 

14,487,232.83 

(14,827,944.12) 

2,324,176.58 

(1,897,020.12) 

14,889,176.58 

(15,157,020.12) 

1,981,360.33 

(1,606,626.12) 

15,321,360.33 

(15,516,626.12) 

1,617,414.08 

(1,295,042.12) 

15,787,414.08 

(15,910,042.12) 

1,230,846.58 

(960,358.62) 

16,275,846.58 

(16,320,358.62) 

820,435.33 

(600,934.62) 



(3,097,945.06) 



(3,101,448.06) 



(3,101,891.56) 



(3,104,423.19) 



11,276,976.06 



(184,478.83) 



(183,503.33) 



(184,477.83) 



(186,823.58) 



(184,435.33) 



Montague DeRose and Associates 
Public Finance 



File = SAN FRAN FUC V09.SF-2003 Sewer Refunding (Restructure vla)-Issue Summary 

11/26/2002 1:01 FM 



Page 4 



51 



n i i a i inn c II o ii 

Hage J of 3 







$420,600,000 












City and 


County of San Francisco 










Sewer Revenue Bonds, Series 2003 












Scenario 4 












DEBT SERVICE COMPARISON 






Date 


Total P+I 


DSR 


Net New D/S 


Old Net D/S 


Savings 


FISCAL TOTAL 


10/01/2021 


- 


- 


- 


16,795,435.33 


16,795,435.33 


- 


1/01/2022 


17,142,408.25 


(381,473.63) 


16,760,934.62 


- 


(16,760,934.62) 


- 


4/01/2022 


- 


- 


- 


384,063.46 


384,063.46 


- 


6/30/2022 


- 


- 


- 


- 


- 


(182,370.45) 


7/01/2022 


596,184.25 


(381,473.63) 


214,710.62 


- 


(214,710.62) 


- 


10/01/2022 


- 


- 


- 


1,706,222.02 


1,706,222.02 


- 


1/01/2023 


15,921,184.25 


(13,431,213.14) 


2,489,971.11 


- 


(2,489,971.11) 


- 


4/01/2023 


- 


- 


- 


259,420.00 


259,420.00 


- 


6/30/2023 


- 


- 


- 


- 


- 


(739,039.71) 


7/01/2023 


223,786.75 


(107,429.10) 


116,357.65 


- 


(116,357.65) 


- 


10/01/2023 


- 


- 


- 


3,004,420.00 


3,004,420.00 




1/01/2024 


3,128,786.75 


(107,429.10) 


3,021,357.65 


- 


(3,021,357.65) 


- 


4/01/2024 


- 


- 


- 


177,756.25 


177,756.25 


- 


6/30/2024 


- 


- 


- 


- 


- 


44,460.95 


7/01/2024 


152,614.25 


(107,429.10) 


45,185.15 


- 


(45,185.15) 


- 


10/01/2024 


- 


- 


- 


3,082,756.25 


3,082,756.25 


- 


1/01/2025 


3,187,614.25 


(107,429.10) 


3,080,185.15 


- 


(3,080,185.15) 


- 


4/01/2025 


- 


- 


- 


91,332.50 


91,332.50 


- 


6/30/2025 


- 


- 


- 


- 


- 


48,718.45 


7/01/2025 


78,105.00 


(107,429.10) 


(29,324.10) 


- 


29,324.10 


- 


10/01/2025 


- 


- 


- 


3,161,332.50 


3,161,332.50 


- 


1/01/2026 


3,253,105.00 


(5,223,100.31) 


(1,969,995.31) 


- 


1,969,995.31 


- 


6/30/2026 


- 


- 


- 


- 


- 


5,160,651.91 


Total 


596,858,277.77 


(56,194,919.05) 


540,663,358.72 590,514,674.40 


49,851,315.68 


- 



PRESENT VALUE ANALYSIS SUMMARY (NET TO NET) 



Gross PV Debt Service Savings 

Effects of changes in DSR investments.. 



30,274,566.17 
18,775,053.68 



Net PV Cashflow Savings @ 4.048%(AIC).. 



49,049,619.85 



Transfers from Prior Issue Debt Service Fund (16,527,548.50) 

NET PRESENT VALUE BENEFIT $32,522,071.35 



NET PV BENEFIT /S394,417,227 REFUNDED PRINCIPAL.... 
NET PV BENEFIT /$420,600,000 REFUNDING PRINCIPAL.. 



8.246% 
7.732% 



REFUNDING BOND INFORMATION 



Refunding Dated Date 

Refunding Delivery Date.. 



1/28/2003 
1/28/2003 



Montague DeRose and Associates 
Public Finance 



File = SAN FRAN PUC V09.SF-2003 Sewer Refunding (Restructure via) -Issue Summary 

11/26/2002 1:01 PM 



Page 5 52 



A1 






Page 1 of 3 
A, 

San Francisco Public Utilities Commission isL^ 




MEMORANDUM 



DATE: 

TO: 

FROM: 

SUBJECT: 



December 4, 2002 

Harvey Rose, Budget Analyst 

Bill Berry, Assistant General Manager J-jN) 
for Business Services, SFPUC 

Clean Water Enterprise Refunding 



The Commission adopted a resolution yesterday approving the issuance of Clean Water 
Enterprise refunding bonds and the forms of certain bond-related documents. We are now 
seeking Board of Supervisor approval for the refunding. The following may be useful 
background in connection with your office's review of this refunding. 

The Clean Water Enterprise is seeking to refund all of the outstanding sewer revenue bonds 
of the City - Series 1992, Series 1994, Series 1995A and Series 1995B - with an aggregate 
principal amount outstanding of $400,945,000. The purpose of the refunding is three-fold: 

■ Refunding the bonds will result in approximately $30 million in debt service savings 
on a net present value basis in the current interest rate environment (the actual 
savings to be realized will depend on the market conditions at the time of sale); 

■ The financing plan calls for structuring the refunding bonds so as to smooth out 
future debt service payments, thus creating .financial relief in the near-term and 
permitting rate increases to be phased in gradually; and 

■ Refunding all of the outstanding debt affords the opportunity to discharge the old 
resolution and establish a new indenture. The new indenture will incorporate certain 
administrative, legislative and legal changes that have occurred since Clean Water 
last issued bonds in 1995. 

Outstanding Bonded Debt - the Clean Water Enterprise has the following bonded 
indebtedness outstanding. 



Issue 


Outstanding 
(OOO's) 


Average 

Remaining 

Life 


Average 

Remaining 

Coupon 


1992 


$ 171,950 


6.9 yrs 


5.73% 


1994 


$ 166,235 


12.5 yrs 


5.33% 


1995 A&B 


$ 62,760 


12.1 yrs 


6.02% 



Today's Interest Rate Environment - Interest rates are near all-time lows. The bond 
market, particularly the tax-exempt market, has benefited from the weak economy and 
stock market, as investors seek more conservative investments. In today's market the 
average coupon for a Clean Water refunding issue with an average life of 10-1/2 years is 
approximately 4 percent. This translates to net present value savings of approximately $30 
million. 



53 



r a y c c u i 



Clean Water Enterprise Refunding 



December 4, 2002 



This refunding issue is on an accelerated schedule to sell by mid-January 2003 to ensure 
that Clean Water doesn't miss the opportunity to achieve the significant debt service 
savings. 

Refunding Bonds Structure - As shown below, Clean Water's outstanding debt service 
expense drops annually from FY 2003 through FY 2006 and then sharply spikes up in FY 
2007. x 



50,000 -. 

40,000 J 
o 30,000 -I 
g. 20,000 -1 

10,000 | 
" 


CW Existing Debt Service 








c> .c&> r$> •£ v> •> Jo A ~0 t(\f r> rk> 

<£> <£> <^° £* ^> <^> ^> ^> ^> ^y j> ^> 



The current refunding plan calls for structuring the refunding bonds so as to create financial 
relief in the near-term and to smooth out future debt service payments, thereby allowing for 
a more gradual increase in sewer rates under the terms of Proposition E. If current interest 
rates hold, this structure will result in net present value savings of approximately $30 
million, average annual savings of about $15 million through FY 2006, and average annual 
increased costs of $2.9 million from FY 2007 to the final maturity of the bonds in FY 2026. 
The following chart compares the existing debt service to the proposed debt service. Note 
that the precise results of the refunding are dependent upon market conditions on the day 
of sale. 



CW Comparative Debt Service 



60,000 i 

50,000 

w 40,000 

§ 30,000 

**■ 20,000 

10,000 






A 



r> 



^ $* ^ <& j? jy </y jr <c 



& 



I Existing ■ Proposed 



Indenture - Refunding all of the outstanding debt affords a unique opportunity to 
discharge the old resolution and establish a new trust indenture. The resolution, which 



1 As approved by the Board of Supervisors, in November 2001, the Clean Water Enterprise used 
$5,585,000 of State Loan proceeds to defease bonds due in FY 2005 and $22,860,000 of State Loan 
proceeds to defease bonds due in FY 2006. r . 



rd g e -> oi j 



Clean Water Enterprise Refunding - 3 - December 4, 2002 



creates the legal structure for the security of sewer revenue bonds issued by the City 
(known as indenture for an enterprise), has not been changed (except for technical 
amendments) since it was written in connection with bonds sold in 1988. 

■ Clean Water last issued debt in 1995, at which time it was under the Department of 
Public Works. 

■ The new Charter was adopted in 1996 and certain of its provisions are inconsistent 
with the existing resolution. 

■ Proposition E, the Charter amendment passed on the November 5, 2002 election, 
alters, among other things, the SFPUC's procedures for setting rates and issuing 
revenue bonds 

The new indenture has been drafted to not only reflect the administrative and legislative 
changes that have taken place, but also to update the document by incorporating terms and 
conditions that balance the current preferences of the credit and investor communities with 
maintaining features that are favorable to Clean Water. Some of the features of the 
indenture are: 

■ The lien position of State Loans has been clarified and is senior to bonded debt 
service but junior to operation and maintenance expenses, thus preserving the 
SFPUC's ability to accept future State Loans on either a senior or parity basis, if 
advantageous. 

■ The flow of funds now mirrors public utility best practices. 

■ The sewer rate covenant has been reaffirmed to require the Commission to set and 
raise rates so that net revenue after the payment of State Loans and plus 
unappropriated fund balance equal at least 125 percent of debt service. 

■ The reserve requirement has been changed from average annual debt service to the 
lesser of maximum annual debt service and average annual debt service. 

It is intended that this indenture will govern future Clean Water bond issuances. 

The refunding is being managed by SFPUC with legal support from Mark Blake/Deputy City 
Attorney, and the bond counsel firms of Jones Hall and Leslie Lava, Esq.. Our financial 
advisors are Montague DeRose and Associates and Gary Kitahata & Company. 

If we can provide you with further information, please email me at wberrv gisfwater.org or 
call me at (415) 554-2457. 



cc: The Honorable Aaron Peskin 

The Honorable Sophie Maxwell 

The Honorable Chris Daly 

Gloria L. Young, Clerk of the Board of Supervisors 

Gail Johnson, Clerk of the Finance Committee 

Monique Moyer, Director Mayor's Office of Public Finance 

Patricia E. Martel, General Manager, SF Public Utilities Commission 



i 
i 

! 

■ 

i 

55 I 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

Item 9 - File 02-1126 



Department: 
Item: 



Location: 

Purpose of Lease: 

Lessor: 

Lessee: 

Number of Acres: 

Annual Revenues 
Payable by Santa 
Clara Sand and 
Gravel Co., Inc 
to the PUC: 



Public Utilities Commission (PUC) 

Resolution authorizing a Third Amendment to a Public 
Utilities Commission lease with the Santa Clara Sand 
and Gravel Co., Inc. to extend the existing lease which 
expired December 31, 2000 until June 30, 2005. 

308.5 acres of land owned by the PUC on Parcel 65, 
adjacent to Interstate 680 on Calveras Road in the Town 
of Sunol in Alameda County. 

For operation and maintenance of quarry. 

San Francisco Public Utilities Commission 

Santa Clara Sand and Gravel Co., Inc. 

308.5 acres 



Royalty rates of: (a) the greater of 10.5 percent of the 
gross average sales price per ton of sand and gravel sold 
or $0.9723 per ton (an 11.1 percent increase from the 
prior rate of $0,875 per ton) of sand and gravel sold from 
the commencement date of the subject lease 1 (see 
Comment No. 1), through June 30, 2003, (b) the greater of 
10.5 percent of the gross average sales price per ton of 
sand and gravel sold or $1.00 per ton (a 2.85 percent 
increase per ton) in Fiscal Year 2003-2004, and (c) the 
greater of 10.5 percent of the gross average sales price per 
ton of sand and gravel sold or $1.07 per ton (a 7 percent 
increase per ton) in Fiscal Year 2004-2005, with a 
minimum royalty amount payable to the PUC of not less 
than $500,000 per fiscal year. The royalty rate, to be paid 
monthly, is based on the sale of sand and gravel, 



1 The Third Amendment is for approximately 30 months, from the date of final approval by the Board 
of Supervisors and the Mayor through June 30, 2005, but the Santa Clara Sand and Gravel Company 
has agreed to pay the City the proposed rate of $0.9723 per ton retroactive from January 1, 2002. 
Therefore, revenue projections for the Third Amendment are based on the full Fiscal Year 2002-2003. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

56 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



Security Deposit 
Required of 
Lessee: 

Extended Lease 
Period: 



Right of Renewal: 
Description: 



including overburden 2 by the Santa Clara Sand and 
Gravel Company to its customers. 

These royalty rates are projected to produce the following 
annual revenue according to the PUC: 



Fiscal Year 2002-2003 
Fiscal Year 2003-2004 
Fiscal Year 2004-2005 



$975,290 

$1,003,075 

$1,073,290 



$200,000 bond in case of default or damages 



Approximately thirty months, from the date of final 
approval by the Board of Supervisors and the Mayor 
through June 30, 2005. 

None 

The proposed resolution would authorize the PUC to 
extend the existing 20-year lease, which has been 
extended on a month-to-month basis for over 20 months 
(see below), by approximately 30 months until June 30, 
2005 with the Santa Clara Sand and Gravel Company 
covering approximately 308.5 acres of land for the 
operation of a quarry located on Parcel 65 in the Town of 
Sunol in Alameda County. Currently, the PUC leases 744 
acres of PUC-owned land in Alameda County for 
aggregate mining operations, which include areas mined 
plus non-mineable areas. The PUC has two leases for the 
744 acres, one with the Mission Valley Rock Company 
which is currently leasing 427 acres from the PUC, or 
57.4 percent of the 744 acres, and one with the Santa 
Clara Sand and Gravel Company which is currently 
leasing 317 acres from the PUC, or the remaining 42.6 
percent of the 744 acres. According to Mr. Gary Dowd of 
the PUC, the Santa Clara Sand and Gravel Company 
lease expired on December 31, 2000, and the PUC has 
since been leasing the subject property to the Santa Clara 
Sand and Gravel Company on a month-to-month basis 



2 Overburden is the additional clay and soil material that is required to be excavated from the quarry 
site that is not useable for construction material and would be sold at significantly lower prices as 
topsoil or other related purposes. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

57 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



from January 1, 2001 to date or a period of over 20 
months (see Comment No. 3). 

The existing lease with the Santa Clara Sand and Gravel 
Company, which began on December 31, 1980, was 
originally for approximately 272 acres of land with a 
royalty rate of $0.30 per ton of gravel sold from the site, 
with a minimum royalty amount of $125,000 per year. 
The lease allowed the Company to (1) operate and 
maintain a gravel and sand quarry in accordance with the 
PUC's preferred mining plan; (2) pay to the PUC $0.30 
per ton of sand and gravel removed from the premises, 
with CPI adjustments to the royalty rate on an annual 
basis, with a minimum royalty amount of not less than 
$125,000 per year and (3) perform all mitigation 
measures as set forth in the Alameda County mining 
permit and the subject lease agreement, in order to 
minimize the impact of the mining activity on 
surrounding lands. 

In June of 1986, as previously approved by the Board of 
Supervisors (File 65-86-5), the PUC amended the lease 
(First Amendment), which increased the royalty rate by 
$0.20 per ton from $0.30 per ton to $0.50 per ton with a 
minimum royalty amount of not less than $200,000 per 
year, with annual Construction Cost Index adjustments. 
In addition, the amendment increased the permissible 
depth of the gravel pits from 100 feet to 140 feet. In 
January of 1994, the Second Amendment was approved 
by the Board of Supervisors (File 65-94-6), which 
increased the lease area by 45 acres from approximately 
272 acres to 317 acres, and increased the royalty rate by 
$0.07 per ton from $0.50 per ton to $0.57 per ton. Mr. 
Dowd reports that the royalty rate for Calendar Year 
2001 was adjusted from $0.57 per ton to $0,875 per ton, or 
by $0,305 per ton in accordance with the Construction 
Cost Index for San Francisco, as provided for in the 
Second Amendment and as explained in Attachment I, 
provided by the PUC. 

Attachment I shows the amount of PUC-owned land 
leased to the Santa Clara Sand and Gravel Company, and 
the royalty rates proposed under the subject Third 
Amendment. In Attachment I Mr. Dowd explains the 
basis of the proposed royalty rates. According to Mr. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

58 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

Dowd, the Santa Clara Sand and Gravel Company mined 
1,133,486 tons in 1999, 1,053,197 tons in 2000 and 
822,542 tons in 2001. Mr. Dowd further reports that the 
Santa Clara Sand and Gravel Co., Inc paid royalty 
amounts to the PUC in the following amounts: (a) 
$907,922 in 1999; (b) $843,611 in 2000; and (c) $719,724 
in 2001. Mr. Dowd reports that under the Third 
Amendment there would be no Construction Cost Index or 
other adjustments to the royalty rates during the 
extended term. However, Mr. Dowd states that the 
proposed minimum royalty amount would increase from 
$200,000 per year to $500,000 per year under the 
proposed Third Amendment. Attachment III is a 
memorandum from Mr. Dowd, which provides additional 
information on the proposed royalty rates per ton. 

The proposed Third Amendment to the Lease would 
decrease the Santa Clara Sand and Gravel Company 
lease area by 8.5 acres from approximately 317 acres to 
approximately 308.5 acres. According to Mr. Dowd, the 
PUC is decreasing the current lease area because the 
subject 8.5 acres is separated by the Alameda Creek and 
cannot be mined by the Santa Clara Sand and Gravel 
Company due to its inaccessible location. Mr. Dowd 
reports that the PUC plans to issue a new month-to- 
month lease to the Mission Valley Rock Company 
covering the 8.5 acres because the 8.5 acres is adjacent to 
one of the Mission Valley Rock Company's existing leases. 
Mr. Dowd advises that it is anticipated the 8.5 acres will 
take approximately one year to mine. 

Comments: 1. The subject Third Amendment to the Lease is for 

approximately 30 months, from the date of final approval 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

59 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

by the Board of Supervisors and the Mayor through June 
30, 2005. However, the Santa Clara Sand and Gravel 
Company has agreed to and has been paying the PUC the 
royalty rate of $0.9723 per ton retroactively for sand and 
gravel sold to its customers since January of 2002. 

2. In Attachment II, Mr. Joshua Milstein of the City 
Attorney's Office reports that in September of 2000 the 
PUC adopted the Alameda Watershed Management Plan, 
which contains policy for the continuation of mining and 
ultimate reclamation of the subject mining area located in 
the Sunol Valley as water storage reservoirs. Mr. Milstein 
further states that the PUC is now requesting an 
extension to the subject lease in order to provide the PUC 
with adequate time to complete planning studies for 
expanding the mining on the subject acres as proposed in 
the Alameda Watershed Management Plan and to 
conduct a competitive Request for Proposal (RFP) process 
for the expansion of the mining. Mr. Milstein reports that 
the additional analysis is needed because the Alameda 
Watershed Management Plan looked at the mining at a 
"program" level and not on a "project" level. Mr. Dowd 
estimates that the RFP would occur in February of 2003 
for a lease term of approximately 20 years, which he 
advises is the estimated length of time for the quarry pit 
to be excavated. 

3. The PUC initially awarded a 25-year lease to the 
Santa Clara Sand and Gravel Company in 1968. The 
1968 25-year lease was amended in 1980 as approved by 
the Board of Supervisors and replaced with the existing 
20-year lease (File 468-80). Therefore, the Santa Clara 
Sand and Gravel Company has been leasing at least some 
portion of the subject 308.5 acres of land for 
approximately 35 years. The Budget Analyst requested 
information on the bidding process for the original lease. 
Mr. Dowd states in Attachment IV that the PUC is 
unable to explain whether or not the initial lease in 1968 
with the Santa Clara Sand and Gravel Company was 
awarded through a competitive bid process. Mr. Dowd 
states in Attachment IV that the proposed subject 
approximate 30-month lease extension with the Santa 
Clara Sand and Gravel Company is not being put out for 
competitive bid because any new operator would have to 
invest substantial capital in order to operate the quarry 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

60 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

and that the lease extension will allow the PUC to obtain 
additional environmental studies needed before a long- 
term lease is issued. The Budget Analyst questions why 
the PUC needs another 30-month extension to this 
existing lease at this time, without the use of competitive 
bidding procedures, when the existing lease has been 
extended on a month-to-month basis for the past 20 plus 
months. 

In Attachment III Mr. Dowd states that the PUC has 
maintained the existing lease on a month-to-month basis 
for over 20 months, without the approval of the Board of 
Supervisors for a new lease, in order to conduct a 
"comprehensive study of the potential for existence of 
endangered species at the subject lease area." 

4. The proposed Third Amendment to the Lease also 
permits the City to request that the Santa Clara Sand 
and Gravel Company sell sand, road base, drain rock and 
other mined materials or products to the City, as needed, 
at the lowest rate that the Santa Clara Sand and Gravel 
Company charges to its wholesale customers, in exchange 
for a credit against the monthly royalty payments. Mr. 
Dowd reports that the PUC Watershed staff estimate that 
the PUC would purchase approximately $50,000 annually 
of sand, road base, drain rock and other mined material 
from the Santa Clara Sand and Gravel Company to 
upgrade and improve existing roads within the PUC 
watershed area. 

5. According to the proposed Third Amendment to the 
Lease and as explained in Attachment I, the Santa Clara 
Sand and Gravel Company would pay to the PUC a sum 
not to exceed $100,000 for the funding of a hydrologic 
study of Alameda Creek. The hydrologic study would 
determine the impact of future mining expansion on the 
Alameda Creek's aquatic resources, in order to minimize 
the impacts and restore the Alameda Creek to a more 
natural appearance and function. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

61 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors because the Budget Analyst 
questions why the PUC needs another 30-month 
extension of the existing lease (which was originally 
awarded in 1968 and amended in 1980) with the Santa 
Clara Sand and Gravel Company without the use of 
competitive bidding procedures when the existing lease 
has been extended by the PUC on a month-to-month basis 
for the past 20 plus months. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

62 




Attachment I 
Page 1 of 3 



San Francisco public utilities Commission 

1155 MARKET ST. , 5TH FLOOR, San FRANCISCO, C A 94 1 03 • TEL. (4 1 5) 487-52 1 • FAX (4 1 5) 487-5200 




Water 

Hetch Hetchy 

water & power 

Clean Water 

flLLIE L BROWN, JR. 

IAY0R 

NN MOLLER CAEN 
RESIDENT 

.DENNIS NORMANDY 
ICE PRESIDENT 
SHOK KUMAR BHATT 
EFFREY A. CHEN 
OBERT J. COSTELLO 

ATRICIA E. MARTEL 

iENERAL MANAGER 



MEMORANDUM 

DATE: October 9, 2002 

TO: Finance and Labor Committee Members 

FROM: Garrett M. Dowd, Director 

SFPUC Bureau of Commercial Land Management 

SUBJECT: THIRD AMENDMENT TO LEASE TO SANTA CLARA SAND 
AND GRAVEL CO., INC. 

Recommended Action 



Authorizing a Third Amendment to Lease between the City and County of San 
Francisco and Santa Clara Sand and Gravel Co., Inc., Lessee, for SFPUC 
land located in the Town of Sunol. The property will be used for the operation 
of a gravel quarry. 

Background 

In 1980, the SFPUC entered into a Lease-agreement with Santa Clara Sand 
& Gravel for approximately 272 acres of land located in Sunol for the 
operation of a quarry. The royalty rate was $0.30 per ton of gravel removed 
from the site. 

In June 1986, the SFPUC amended the original Lease with the First 
Amendment to Lease. The first amendment increased the royalty rate to 
$0.50 per ton and increased the permissible depth of the gravel pits from 100 
feet to 140 feet. 

In January 1994, the SFPUC amended the original Lease with the Second 
Amendment to Lease. The second amendment increased the lease area by 
45 acres from approximately 272 acres to 317 acres, increased the royalty 
rate to $0.57 per ton with annual adjustments based on the Construction Cost 
Index and extended the term of the Lease to December 2000. 

Lessee has been on a month-to-month holdover pending review of 
Environmental issues by the San Francisco Planning Department. 

Analysis/Reason for Recommendation 

This Third Amendment to Lease will extend Santa Clara Sand and Gravel's 
existing operations under the lease term to June 30, 2005. It will also 



63 



Attachment I 
Page 2 of 3 



decrease the lease area by 8.5 acres from approximately 317 acres to 
approximately 308.5 acres. The SFPUC is decreasing Santa Clara Sand and 
Gravel's current lease area because the 8.5 acres is cut off from their mining 
operation by Alameda Creek and therefore cannot be mined. The three-year 
extension is being granted to allow the SFPUC adequate time to complete 
planning studies and an RFP process in which the property will be put out to 
bid under a much longer-term contract. It is estimated the formal bid process 
and approval to modifications of the existing Surface Mining Permit will take 
approximately three years, during which time further environmental 
assessment will take place for proposed lease expansion under guidelines set 
forth in the Alameda Watershed Management Plan. 

The royalty rate for the Extended Term will be as follows: 

Fiscal Year 2002-2003: The greater of 10.5% of the gross average sales price 
per ton sold or $0.9723/ton . 

Fiscal Year 2003-2004: The greater of 10.5% of the gross average sales price 
per ton sold or $1 .00/ton . 

Fiscal Year 2004-2005: The greater of 10.5% of the gross average sales price 
per ton sold or $1 .07/ton . 

The above rates are based on an industry standard wherein rental rates equal 
10.5 % of the average price per ton of materials sold. The rates for the 2003 
and 2004 calendar are based on anticipated projections and favor the SFPUC 
in that the fees will be paid regardless of potential economic downturns. 
There will be no CPI or other adjustment to the royalty rate during the 
Extended Term. All other terms and provisions relating to payment of the 
royalty rate and the annual minimum royalty payment shall remain as set forth 
in the First Amendment to Lease. 

This Third Amendment to Lease will also have additional language added to 
the Lease. Santa Clara Sand & Gravel will provide to City, at City's request, 
aggregate from Santa Clara Sand and Gravel mining on the Premises to the 
extent Santa Clara Sand and Gravel has not previously committed such 
aggregate to another customer. The aggregate is to be used within the 
SFPUC watersheds to upgrade and improve existing roads. Santa Clara 
Sand & Gravel will receive a rent credit against the next payment(s) of rent in 
the amount of the rate then being charged by Santa Clara Sand and Gravel 
for such aggregate. If Santa Clara Sand and Gravel charges different rates to 



64 



Attachment I 
Page 3 of 3 



different customers, City shall be charged the cheapest rate that Santa Clara 
Sand and Gravel charges to its most valued customers for the same material. 

Santa Clara Sand & Gravel has also agreed to pay to City a sum not to 
exceed $100,000 for purposes of funding a hydrologic study. The purpose of 
the hydrologic study is to determine the impacts, if any, on aquatic resources 
of Alameda Creek arising out of future mining expansion under Mining Permit 
SMP 30, and to suggest appropriate measures to minimize these impacts and 
to restore the adjacent Alameda Creek channel to a more natural appearance 
and function, as contemplated in the Alameda Watershed Management Plan. 

The Non-Discrimination and Tropical Hardwoods and Virgin Redwoods 
sections of the current Lease will be replaced with new sections to reflect the 
new provisions the City has implemented after the Second Amendment. 

The following new sections will be added to the Lease to reflect the new 
codes and ordinances adopted by the City: No Relocation Assistance; 
Waiver of Claims; Conflicts of Interest, Pesticide Ordinance, EIC Forms, No 
Tobacco Advertising, and False Claims. 

This Third Lease Amendment will extend the term of Santa Clara Sand and 
Gravel's Lease to June 30, 2005. There will be no expansion of mining 
operations under the proposed amendment, which simply extends the term of 
the existing lease. 

Attached is the agenda item by which the SFPUC approved the Third 
Amendment to Lease. 



Fiscal Implications 

None. 



Attachment 



65 



City and County of San Francisco 

Dennis J, Herrera 
City Attorney 




Attachment I 
Page 1 of 3 

Office of the City attorney 

joshua d. milstein 
Deputy City Attorney 

Direct Dial: (415)554-4211 

E-Mail: JOSHUA_D_MIL5TEIN @ci.sf.ca.us 



MEMORANDUM 

TO: Leanne Nhan, Budget Analyst's Office 

FROM: Joshua D. Milstein 

Deputy City Attorney 

DATE: July 9, 2002 

RE: Proposed Three- Year Renewal of Santa Clara Sand & Gravel Mining Lease (San 

Francisco Public Utilities Commission Property) 



This is in response to your request for a background memo on the proposed lease 
extension. 

The SFPUC has leased portions of its Alameda Watershed holdings for gravel mining for 
over 30 years. The lease extension under consideration by the Board is located at the upstream 
end of Sunol Valley. The area has been mined extensively to date. The lease area is 
approximately 1 to 2 miles upstream from the Sunol Water Temple. 

In September 2000 the SFPUC adopted the Alameda Watershed Management Plan 
(Plan). One component of the Plan, the Sunol Valley Resource Management Element, contained 
policy for continuation of mining and ultimate reclamation of the area as water storage 
reservoirs. The SFPUC water system needs additional water storage to meet current and future 
demand for water in the SFPUC service area in San Francisco, San Mateo, Santa Clara and 
Alameda Counties. 

The Sunol Valley Resource Management Element of the Plan called for maximizing 
mining revenue and future water storage in Sunol Valley. At the conclusion of mining in Sunol 
Valley the SFPUC will have available approximately 65,000-acre feet of additional water storage 
space available in phases over time as mining is completed. This is the equivalent of another 
Crystal Springs Reservoir. In essence, the mining lessees are paying the City (through royalty 
revenues) to dig reservoirs, which are difficult to construct today due to ever increasing 
environmental restrictions. 

The Plan looked at mining in Sunol Valley on a "program" level, meaning that future 
proposed expansion of mining would require project-level environmental analysis. Future 
expansion of mining in the lease area will take place after the conclusion of the proposed three 
year extension before the Board, and would primarily deepen the mined area to 200 feet from the 
current 140 depth, with some slight expansion of mining area boundaries. The Plan also 
contemplated mining of the area under the existing gravel processing plant so that reservoir 
storage space would be maximized. 



56 

City Hall • 1 Dr. Carlton B. Goodlett Place. Room 234 • San Francisco. California 941 02 
Reception: (415)554-3900 or (415) 554-6765 • Facsimile: (415)554-6793 



'"' ■ Attachment. Li. 

Page 2 of 3 

City and County of San Francisco Office of the City Attorney 

Memorandum 
Privileged 4 Confidential 

TO: Leanne Nhan, Budget Analyst's Office 

DATE: July 9, 2002 
PAGE: 2 

RE: Proposed Three- Year Renewal of Santa Clara Sand & Gravel Mining Lease (San 

Francisco Public Utilities Commission Property) 

The proposed lease extension before the Board would continue the existing mining 
operation for an additional three years. A three-year extension was chosen for the following 
reasons: 

" 1 . The planning horizon for expansion of mining will take several years. During the 
three-year lease extension, the SFPUC will put the future expansion of mining out to 
bid under an RFP process to generate maximum interest and royalty revenue to the 
SFPUC. The winning proposer will be responsible for obtaining modifications to the 
existing mining permit from Alameda County. 1 Based on the mining permit 
modification, the County will conduct environmental review of the mining expansion 
and incorporate mitigation measures suggested by the hydrologic study referred to 
below. These measures will likely include installation of a clay cutoff wall to prevent 
infiltration of Alameda Creek water into the mining pit, along with creek restoration 
measures in this part of Sunol Valley that are needed to enable the passage of 
steelhead trout from SFPUC watershed lands to San Francisco Bay. 2 

2. The Plan called for implementation of certain mitigation measures prior to expansion 
of mining. Surveys are required for threatened and endangered frog and salamander 
species and corrective actions are to be taken if the species are found in ponds on the 
lease area. A hydrologic study is also required to evaluate the effect of mining 
expansion on the adjacent Alameda Creek. Water from Alameda Creek currently 
percolates into the active mining pit, complicating the SFPUC's efforts to work with 
interested agencies and environmental groups to reestablish an anadromous steelhead 
run in Alameda Creek. Although the matter before the Board does not involve a lease 
expansion, prudent planning requires the SFPUC to evaluate and, barring overriding 
considerations, adopt mitigation measures identified in the County's environmental 
document for the lease expansion. The proposed lease extension requires the lessee 
to undertake the necessary studies, which will result in the crafting of effective 
mitigation measures that can be implemented in the future lease expansion in 
accordance with the Plan. 

At the close of the proposed three-year lease extension, the SFPUC will be prepared to 
issue a new long-term lease for mining expansion in accordance with the Plan. The result will be 
an assured revenue stream for the SFPUC; future water storage; and significant creek restoration 
activities to accommodate an anadromous steelhead run, which is expected to have access to this 
part of the watershed in 2005-06 after barriers to fish migration in the Fremont area (owned by 
parties other than the City) are modified to allow fish passage upstream from the Bay. The 
proposed three-year lease extension before the Board is thus structured to avoid having the 



' San Francisco does not have a surface mining ordinance under the State Mining and Reclamation Act (SMARA). 
necessitating use of the County's SMARA process. 

: These cutoff walls have been very effective in preventing water intrusion in other mining leases. Continuation of 
mining under the proposed the lease is essential to resolving this issue so that the SFPUC will not have to pay for 
installation of the cutoff walls and other creek restoration measures. 



67 



«.u L-ctuumeuL 



Page 3 of 

City and County of San Francisco Office of the City Attorney 

Memorandum 
Privileged & Confidential 

TO: Leanne Nhan, Budget Analyst's Office 

DATE: July 9, 2002 
PAGE: 3 

RE: Proposed Three-Year Renewal of Santa Clara Sand &. Gravel Mining Lease (San 

Francisco Public Utilities Commission Property) 



SFPUC pay for project development costs (e.g. preparation of the County's environmental 
analysis) and to dovetail with ongoing water resource and restoration planning efforts. 

If I can answer any further questions please give me a call. 

J.D.M. 

cc: P. Martel 
G. Dowd 
M. Carlin 
J. Naras 
V. Clayton 
T. Lakey 



68 

N.\PUCW\JMlli'EISt*4'B*r \RMC80GAN.OCC 



Attachment IH 
Page 1 of 2 

DATE: October 8, 2002 

TO: Sarah Graham, Budget Analyst Office 

FROM: Garrett M. Dowd, Director 

SFPUC, Real Estate Services 

RE: Proposed Three- Year Lease Renewal of Santa Clara Sand and Gravel 

(SCS&G) Mining Lease with the San Francisco Public Utilities Commission 



This is in response to your request for further detail as related to the negotiated rental rate 
structure for the above-referenced lease. 

It was initially anticipated that the Third Lease Amendment extending the lease term for 
three years would coincide with the December 31, 2000 expiration date of the original 
lease. However, due to circumstances beyond staffs control; namely environmental 
clearance issues, approval of the Third Lease Amendment has been delayed more than 
two years. This delay, based on recommendations from the City Attorney's Office, 
resulted in a far more comprehensive study of the potential for existence of endangered 
species at the subject lease area; namely the California Red-Legged Frog and California 
Tiger Salamander. Neither species was located at the site. 

Given the delay in approval of the Third Lease Amendment the existing lease continued 
on a month-to-month basis and staff and the lessee agreed to adjust the rent for the 2001 
calendar year based on existing provisions in the old lease. Thus, on January 1, 2001 the 
rent was increased to $.875 per ton based on changes in the Construction Cost Index for 
San Francisco as provided for in Article 4B, page 4, of the Supplemental Agreement in 
Modification to the Lease dated June 20, 1986. 

On January 1, 2002, the Third Amendment had still not been approved and 
environmental clearance was still pending. In an effort to increase royalties to the City 
and bring the lease to Fair Market Value sooner rather than later staff demanded that 
SCS&G begin paying the greater of 10.5% of the gross average sales price per ton sold or 
$0.9723 per ton as of January 1, 2002. The lessee agreed and has been paying the 
increased tonnage rate. Additional adjustments are scheduled for Fiscal year 2003-2004 
( greater of 10.5% or $1.00 per ton) and Fiscal year 2004-2005 ( greater of 10.5% or $1.07 
per ton). These adjustments will keep the lease at Fair Market Value and protect the City 
from any unforeseen downturns in the market. 

The SFPUC s revenue projections are based on (1) a royalty rate of $0.9723 per ton in 
Fiscal Year 2002-2003, $1.00 per ton in Fiscal Year 2003-2004, $1.07 per ton in Fiscal 
Year 2004-2005, and (2) an estimated 1,003,075 tons of materials quarried annually, 
based on the average tons quarried in the past three years. Based on these projections, the 
proposed Amendment to the lease is projected to generate an estimated $2,726,558 



69 



Attachment ITT 
Page 2 of 2 

during the approximate three year extended period, or $975,290 in Fiscal Year 2002- 
2003, $1,003,075 in Fiscal Year 2003-2004, and $1,073,290 in Fiscal Year 2004-2005. 

Finally, I wanted to address your question related to royalties being based on a 
percentage (10.5%) of the gross average sales price per ton sold. This method is an 
industry standard and was supported by an independent auditor hired by the SFPUC in 
1994. In order to maintain consistency throughout the lease term the same approach has 
been applied to the three-year extension. The annual royalty rate of at least 10.5 percent 
of the annual average sales price per ton was established to protect the City from any 
downturns in the market for sand and gravel. 

If I can offer any further assistance please feel free to contact me at (415) 487-521 1. 



70 



Attachment IV 

DATE: October 25, 2002 

TO: Sarah Graham, Budget Analyst Office 

FROM: Garrett M. Dowd 

Director, SFPUC, Real Estate Services 

RE: Proposed Three- Year Lease Extension of Santa Clara Sand and Gravel 

(SCS&G) Mining Lease L-3430A, San Francisco Public Utilities Commission 

This is in response to your request for further detail as to why the above referenced 
Lease Extension was not put out to bid and whether or not the original Lease was ever 
put out to bid. 

The Lease was not put out to bid at this time because of the fact that any new operator 
would have to invest substantial capital (millions of dollars) in order to operate the 
quarry. The existing processing plant and other equipment is owned by SCS&G. No 
company would be willing to bid on a short-term (30 month) arrangement or be prepared 
to expend the necessary capital needed to continue the mining operation without 
interruption for such a short time. I also call your attention to page two of the City 
Attorney's memo dated July 9, 2002 in which he explains the various steps that must be 
taken before a long-term lease agreement can be put out bid. 

This extension with SCS&G clearly works to the City's benefit in that the City is raising 
royalty rates while in the process of obtaining environmental studies needed before a 
long-term lease is issued and SCS&G is being asked to pay up to $100,000.00 toward 
those studies. It is in fact possible that the lease could have been left on a month-to- 
month tenancy until such time as the SFPUC was prepared to issue a long-term lease but 
the benefits mentioned above may not have been realized. 

As to your question of how the initial lease was awarded back in the 1960's and whether 
or not it was subject to competitive bidding please note I have thoroughly researched 
SFPUC records contained at our offices and have found no information regarding how 
the original lease was awarded. I only know it was in fact approved by both the SFPUC 
and San Francisco Board of Supervisors. 



71 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

Items 10 and 11 - Files 02-1878 and 02-1882 



Department: 
Items: 



Public Library 

File 02-1878: Resolution authorizing a new lease of 
2,686 square feet of space at the Main Library to the 
Friends and Foundation of the San Francisco Public 
Library for administrative office space. 

File 02-1882: Resolution authorizing a new lease of 387 
square feet of space at the Main Library to the Friends 
and Foundation of the San Francisco Public Library for 
the operation of a bookstore. 



File 02-1878 
Location: 
Purpose of Lease: 



Lessor: 



Lessee: 



Term of Lease: 



Main Library, 100 Larkin Street, sixth floor. 

Administrative office space for the Friends and 
Foundation of the San Francisco Pub He Library. The 
space is to be used only for fundraising and community 
programs benefiting the San Francisco Public Library, 
including the Main Library and all Branch Libraries. 
Currently the space is being used by the Friends and 
Foundation of the San Francisco Public Library for 
administrative office space for fundraising and 
community programs for the San Francisco Public 
Library. The Public Library has permitted the Friends 
and Foundation to use this space since April of 1996 
without a lease. 

City and County of San Francisco through the Public 
Library 

Friends and Foundation of the San Francisco Public 
Library (Friends and Foundation) 

Eighteen months, commencing upon approval by the 
Board of Supervisors. The lease is estimated to begin 
January 1, 2003, according to Mr. Charlie Dunn of the 
Real Estate Division. 



BOARD OF SUPERVISORS 
BUDGET 2 ANALYST 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

No. of Sq. Ft. and 
Monthly Rental Revenues 
Payable by Friends 
and Foundation 
to the City: 



Right of Renewal: 



2,686 square feet at a monthly rate of $5,148.17 
(approximately $1.92 per square foot per month), totaling 
$61,778 per year ($23.00 per square foot per year) for the 
18 month term of the proposed lease. 

None. 



Utilities, Maintenance and 

Repairs, and Janitorial 

Services: The Public Library will provide all utilities, including 

heat, ventilation and air conditioning, water, 
maintenance and repairs and janitorial services at no 
additional cost to the Lessee. 



Tenant 
Improvements: 

File 02-1882 

Location: 

Purpose of Lease: 



None. 



Main Library, 100 Larkin Street, ground floor. 

Retail space for the Friends and Foundation of the San 
Francisco Public Library for the operation of a bookstore. 
The Public Library has permitted the Friends and 
Foundation to use the space since April of 2001 without a 
lease. 



Lessor: 



Lessee: 



Term of Lease: 



City and County of San Francisco, through the Public 
Library 

Friends and Foundation of the San Francisco Public 
Library (Friends and Foundation) 

Approximately four years and ten months, commencing 
upon approval by the Board of Supervisors and expiring 
October 31, 2007. The lease is estimated to begin 
January 1, 2003, according to Mr. Dunn. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

73 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

No. of Sq. Ft. and 
Base Rent Payable 
by Friends 
and Foundation 
to the City: 



387 square feet at a monthly rate of $774 ($2.00 per 
square foot per month), totaling $9,288 per year ($24.00 
per square foot per year) for each of the five years of the 
proposed lease. According to Ms. Susan Hildreth, the City 
Librarian, this lease does not provide for any cost of living 
adjustment during the five year lease period, because 
during that five year period, the Public Library projects 
that the contribution of the Friends and Foundation will 
exceed $300,000, therefore abating the rent as discussed 
below. 



Abatement of Base 
Rent: 



Right of Renewal: 



In the event the Lessee donates more than $300,000 to 
the Public Library during the previous calendar year, the 
Rent of $9,288 per year for the bookstore space would be 
abated and the Lessee would pay rent of only $1.00 per 
year. Ms. Hildreth notes that the $300,000 threshold 
significantly exceeds the fair market value of the rent, 
which is reported to be $9,288 annually. 

Option to extend for three additional five-year periods. 
The Lessee may exercise an Extension Option at any time 
during the term at least 180 days before the Expiration 
Date. In the first year of each five-year option, the Base 
Rent would be adjusted for a cost of living increase 
(COLA) based on the Consumer Price Index. 



Utilities, Maintenance and 

Repairs, and Janitorial 

Services: The Public Library will provide all utilities, including 

heat, ventilation and air conditioning, water, 
maintenance and repairs and janitorial services at no 
additional cost to the Lessee. 



Tenant 
Improvements: 

Description: 



None. 

The two proposed resolutions would approve two new 
leases between the City and the Friends and Foundation 
for: (i) 2,686 square feet located on the sixth floor of the 
Main Library for the administrative offices for the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
74 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 

Friends and Foundation, and (ii) 387 square feet located 
on the ground floor of the Main Library for the operation 
by the Friends and Foundation of a bookstore. The 
Friends and Foundation currently occupy the 2,686 
square feet of office space on the sixth floor of the Main 
Library and the 387 square foot bookstore space on the 
ground floor of the Main Library. In Attachment I, Ms. 
Hildreth explains why the Public Library has permitted 
the Friends and Foundation to occupy the 2,686 square 
feet of office space since April of 1996 and the 387 square 
feet bookstore space since April of 2001 without a lease 
and at no rental cost to the Friends and Foundation. 

Comments: 1. Ms. Hildreth reports that the Friends and Foundation 

is a volunteer organization dedicated to fundraising to 
support the Public Library. The Friends and Foundation, 
a 501 (c) 3 nonprofit organization, was formed out of the 
July 1, 1999 merger of two organizations formerly known 
as the Friends of the San Francisco Public Library and 
the Library Foundation of San Francisco, according to Ms. 
Hildreth. 

2. As shown in Attachment II, provided by the Public 
Library, Ms. Hildreth reports that the Friends and 
Foundation has contributed $1,587,200 to the Public 
Library in FY 2000-2001 and $1,152,420 in FY 2001- 
2002. Ms. Hildreth states that the Public Library expects 
the Friends and Foundation to contribute at least 
$1,000,000 in FY 2002-2003. Ms. Hildreth states in 
Attachment III that "none of the revenue generated in 
2001/02 was a result of proceeds from the sale of Library 
discards, as the Friends & Foundation has not sold 
Library discarded materials in any of their book sales." 
Attachment III also contains a Statement of Activities for 
the Friends and Foundation, which shows all revenue and 
support for FY 2001-2002. However, in accordance with a 
City Attorney's opinion in Attachment III, the Friends 
and Foundation will be selling discarded books of the 
Public Library beginning December 6, 2002. 

3. Mr. Dunn reports that the fair market value of the 
administrative office space is $61,778 on an annual basis, 
or $23.00 per square foot per year, which is the proposed 
rent under the proposed lease (File 02-1878). According to 
Mr. Dunn, the fair market value of the bookstore space is 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

75 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



$9,228 on an annual basis, or $24.00 per square foot per 
year, which is the proposed rent under this lease if the 
Friends and Foundation do not contribute at least 
$300,000 to the Public Library each year (File 02-1882). 

4. Mr. Dunn reports that the proposed lease with the 
Friends and Foundation for the 2,686 square feet of office 
space (File 02-1878), provides that the Friends and 
Foundation could terminate the lease at any time with 90 
days written notice in order to allow the Friends and 
Foundation to relocate from the Main Library as soon as a 
suitable space can be found. Ms. Hildreth reports that the 
Public Library is proposing a term of 18 months under 
that proposed lease to allow the Friends and Foundation 
sufficient time to find new office space and to provide that 
the 2,686 square feet is vacated by the Friends and 
Foundation. Ms. Hildreth advises that the sixth floor of 
the Main Library, where the 2,686 square feet is located, 
was not built to support the weight load of books. 
Therefore, Ms. Hildreth reports, once vacated by the 
Friends and Foundation, the 2,686 square feet on the 
sixth floor will most likely be used for Public Library 
administration offices or for office space for Main Library 
staff. 

5. The Statement of Activities for the Friends and 
Foundation, contained in Attachment III, states that the 
Friends and Foundation had total revenue and support of 
$2,597,745 in FY 2001-2002. Ms. Hildreth reports that, of 
that amount, $182,000 was realized in total revenue from 
the operation of the bookstore in the Main Library. 



Recommendation: Approve the proposed resolutions. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

76 



Attachment I 



Memorandum San Francisco Public Library 

100 Lirkin Street. Sjn Francisco, C/v 94102 

To: Harvey Rose, Budget Analyst 

From: Susan Hildreth, City Librarian^? n 

Re: Friends & Foundation Occupancy of Space in the Main Library 

Date: December 2, 2002 

The Friends of the San Francisco Public Library and the Library Foundation of San 
Francisco occupied space in the Main Library since its opening in April 1996 based on 
memorandums of understanding ( MOU) with the City and County of San Francisco. 
Both of these memorandums expired on June 30, 1999. On July 1, 1999, the Friends of 
the San Francisco Public Library and the Library Foundation of San Francisco merged 
into one entity, the Friends & Foundation of the San Francisco Public Library (FFOL). 

The Library and the FFOL drafted a revised MOU which continued to provide office 
space for the FFOL at a cost of $1 per year based on a minimum of $200,000 annually 
donated to or spent on behalf of the San Francisco Public Library. This proposed MOU 
was heard by the Finance Committee in August 2000 and referred back to the Library 
Commission. Concerns identified by the Finance Committee in tbe proposed MOU were 
the FFOL use of space in the Main Library that could be reallocated to other library uses 
and the minimum contribution level required for provision of space at no charge. The 
Library Commission and the FFOL did approve a revised MOU, which included 
language that required the FFOL to relocate from the Main Library space by June 30, 
2004 and increased the minimum annual contribution level to $300,000. This revised 
MOU also included the provision to allow of the use of the book store space by the 
FFOL. This MOU was not re-introduced to the Board of Supervisors due to changes in 
leadership at die FFOL. Based on past MOU's and the 2000/01 and 2001/02 
contributions of over $1 million made by die FFOL to the San Francisco Public Library, 
the spaces continued to be provided to the FFOL at no charge. 

In March 2002, Martin Gomez, the new executive director of the FFOL, was hired. In 
reviewing the revised MOU, Mr. Gomez and I determined that the only outstanding issue 
in the revised MOU was the FFOL use of space in the Main Library. In reviewing this 
matter with City Attorney and with the Real Estate Division, it was recommended that 
leases be drafted for both spaces. Because the office space could be readily used for 
library purposes, it was determined that a fair market value lease was in order. The 
FFOL are actively seeking new space and will be relocating from the Main Library as 
soon as possible. The "Book Bay at the Main" provides an excellent service to the public 
and makes good use of a previously unprogrammed and unattractive area at the Grove 
Street entrance to tire Main Library. Please contact me if you need any funher 
information. 



77 

•2002 15=16, 415 5sv d ^q 



Attachment 1 1 
Page 1 of 2 



Friends & Foundation of the San Francisco Public Library 

Support to the San Francisco Public Library 

Fiscal Year ending June 30, 2002 



Library Support by Programmatic Area 



Capital Projects 


$ 225,576 


Children's Programming 


118,914 


Project Read 


112,621 


Library Centers/Departments/Branches 


388,164 


Library Staff &. Volunteer Support 


50,158 


Programs & Exhibitions 


101,788 


Public Affairs 


49,797 


Other Library Support 


105,402 


otal Library Support by Programmatic Area 


$ 1,152,420 



Attachment II 
Page 2 of 2 



Friends & Foundation of the San Francisco Public Library 

Support to the San Francisco Public Library 

Fiscal Year ending June 30, 2001 



Library Support by Programmatic Area 



Capital Projects 


S 543,651 


Children's Programming 


120,547 


Sponsored Projects (Project Read, etc.) 


217,307 


Library Centers/Departments/Branches 


347,893 


Library Staff & Volunteer Support , 


50,201 


Programs & Exhibitions 


128,211 


Public Affairs 


73,064 


Other Library Support 


106,326 


Total Library Support by Programmatic Area 


$ 1,587,200 



79 



Attachment 1 1 1 
Page 1 of 5 



San Francisco Public Library 
100 Larkin Street. San Francisco, CA 94102 
Memorandum 

To: Harvey Rose, Budget Analyst 

From: Su9an Hildreth, City Librarian / 

Re: Sources of Funds for Friends & Foundation of the San Francisco Public Library 

Date: December 3, 2002 

Attached to this memo is the "Statement of Activities" from the Friends & Foundation of 
the San Francisco Public Library's 2001/02 audit that shows sources of revenue for the 
Friends &. Foundation under the "Revenue and support" heading. 

Your office has specifically asked whether any of this revenue in 2001/02 was generated 
by the sale of Library materials that had been purchased with City funds, discarded from 
the Library's collection and given to the Friends 8c Foundation for sale in their used book 
stores or sales. None of the revenue generated in 2001/02 was a result of proceeds from 
the sale of Library discards, as the Friends &. Foundation has not sold Library discarded 
materials at any of their book sales. The Friends & Foundation primarily sells materials 
that have been donated directly to them by individuals. 

Also attached to this memo is an opinion from the City Attorney dated November 30, 
1989 that stares, in response to the question of whether surplus library volumes could be 
given to the Friends for sale, "...you may allow the Friends to take the books and sell 
mem so long as the moneys earned from the sale of the books are used to fund Library 
programs". This opinion is pertinent due to the fact that, based on the request of 
Supervisor Peskin, Library materials will begin to be sold, along with other materials 
donated to the Friends & Foundation, at the Friends & Foundation monthly book sales 
held on the Larkin St. plaza of the Main Library. Although the book sales have been in 
operation for several years, the first sale of Library materials will occur on Friday, 
December 6 th , 2002, with proceeds going to the Friends & Foundation. Any Library 
materials included in the sale have been thoroughly reviewed for possible reutilizarion by 
Library staff and offered for use 10 a wide variety of non-profit organizations through the 
Library's Redistribution Program. 

Attachments 



80 
DEC-Q3-2Q02 15=34 415 557 4239 9b>; P. 02 



Atta chment III 
Page 1 of b 
THE FRIENDS AND FOUNDATION OF THE SAN FRANCISCO PUBLIC LIBRARY 

STATEMENT OF ACTIVITIES 

For the year ended Juno 30, 20O2 

With cnmpinin'cj total for die year ended June 30, 2001 











Temporarily 


Permanently 












Unrestricted 


Restricted 


Restricted 


2002 


2001 


Revenue and support 












Ginrnbumris 






S 827,873 


S 289.802 


S 


$ 1,117,675 < 


1 735.273 


Beoucst* 






986,807 






986,807 


842.097 


Olhei income 






729,09 \ 






729,091 


574,020 


Tn-lcmt] donations 






27S.474 






273,47-1 


305.603 


Special event 






225,222 






225,222 


255.7S8 


Net assers released from 


program 


rcitncnons 


926.752 


(■926,752) 









3.971,219 



(636.050) 



3,334,269 



2.71 Mil 



Investment income 
(Ixis.i) on investments 
Dividend and interest income 
Less: investment feci 

Net investment income 

Total revenue and support 

Expenses 

Projrram services 
Support services 

Total expenses 

Change in net assets 

Net mets, bejrinnrng of year 

Net assets, end of year 



(1,662,267) 
980,715 
(S4.972) 



(736.524) 



3.234,695 



2,098.70(5 
886.614 



2,985,320 



249,375 
14,138,824 



(636.950) 



(636,950) 
2,385,665 



S 14,388,199 S 1,748,715 J 



2.603,833 



(\,66ZJ6T) 


(928,958) 


980,715 


1,049.108 


(S4,972) 


(66.344) 



(734,524) 



2,597,745 



2,098,7C*j 
886,614 



2,985,320 



(387,575) 
19,128,322 



2.767.215 



2JS7S.M9 

895,999 



J.S^.OtS 



(806,853] 
19.935.175 



1.603.833 J 18,740,747 S 19,128.322 



The jccompinying note* ire in integral part of these financial statement*. 



DFr-n7-onn? u:PQ 



81 



dlS SS7 dl-lQ 



36". 



P. 02 




Louisa H. flenne, 
City Attorney 



Deputy City Attorney 
(415) 554-3-966 



November 30. 193 9 



Attachment III 
Page 3 of 5 



Kenneth Dowling 

Bead Librarian 

San Francisco Public Library 

Main Branch - Civic Canter 

San Francisco, CA 94102 

Be: Disposal of Surplus Library 8ook3 

Deac Mr. Dowling: 

You have asked this office for an opinion regarding whether 
you may dispose of same 15,QQ0 surplus library volumes by giving 
them to Friends of the Library for sale in their bookstore. 
Having reviewed the relevant lagal authority and discussed the 
matter with the Purchaser's Office and with Jane Winslow of trie 
Friends of the Library (hereinafter sometimes referred to as "the 
Friends,") I conclude that you may allow the Friends to take the 
books and sell them so long as tha moneys earned from the sale of 
the books are used to fund Library programs. 

Library books are considered records of the City and County 
of San Prancisco within the definition set forth in Adninstr3tive 
Code section 8.1. The disposal of all such records is governed 
by Section 8.7 of the Admins trative Code, which provides in 
relevant part; 

(a) Before any book ... or other material of 
historical significance is destroyed, the following 
procedure shall, be observed: 



(2) such items not accepted by the San Francisco 
Public Library may be sold by the office of the Mayor, 
together with copies -thereof, under provisions oE 
Section 8.12-2 of the Administrative Code; and 

(3) in the event the Public Library declines to 
accept said historical material, or after sale thcrecf 
by the Mayor, any remaining such historical material ca^ 
be offered to an his' ■--«.----• Q w 




(413)554-3300 



nFC-0.3-2002 14=30 



Fox Plaza, 1230 Market Street, Sixth Floor 
.■zc5bicccnj_.:nM yh-i 82 . JMHOMdJS 

415" 557 4239 "~96X '" 



San Franc!sco94i0 

P. 03 



: Attachment III 

Page 4 of 5 

(b) After all the steps outlined in paragraph (a) above 
have Been observed, any remaining historical racords, as 
well as any large voluma of records without: historic 
significance which ara to ba destroyed, shall be offered 
for aa l e by the City.Purchaser . The sales contract must 
provide that the buyar guaranties to the satisfaction of 
tha City Purchasar that the recarda will be shceddad 
beyond identification or otherwise destroyed within a 
short period o£ time after taking delivery. 

I understand that the Purchaser has in the past attempted 
to offer surplus library books for aala as a lot to private; 
bookstores, without success. The bookstores would only agree to ■ 
accept selected volumes. Tha only other altarnatives in the past 
were to sell the books as waste paper pursuant to Section 3.7(b) 
or to simply throw them away. 

Friends of the Library is a non-profit organization which 
supports activities of the Public Library. They fund Library 
programs including training, lecture 3eriea, purchases of books 
and equipment 'such as trucks for Library use. The Friends ha^e- 
offered to take the 15,000 surplus library books "and sell those 
that are saleable at their bookstore at Fort Mason Center. I 
have spoken to Jane winlsow of the Friends and she informs me 
that they will take steps to ensure that the "Property oE San 
Francisco Public Library" scamp is obliterated from each volume 
before sale. The Friends will destroy those that cannot be 
sold. Since the Purchaser has found no other practical 
alternative for the disposal of the books, I believe you may 
pursue this means of disposing of the volumes without 
contravening the records destruction guidelines of the 
Adrainstrative Code. 

However, diversion of public property for any private 
purpose is prohibited by California Constitution, Article XVI, 
section 6; 

The Legislature . . . shall have no power ... to make 
any gift or authorize the making of any gift, of any 
public money or thing of value to any individual, 
municipal or other corporation whatever. 

A proposed use of public funds or property is permissible 
if it is far a public purpose. County o£ Sonoma v. State Board 
o£ Equalization C1997) 195 Cal.App.3d 992, 933; City of Oakland 
v. Garrison (1924) 194 Cal.29a, 302. The City must receive a 



DEC -03-2002 14=30 



•— .- . • a? 


Mnrum-vM^m t jc 


■ 


fc^-cn oni hc_or. 


_I'V1 


. . . 


. . 


p. rid 




415 357 4239 


963 





f 



•* u Page b of b 

Mr. Dow ling .1 November 30, 1989 



benefit in exchange for the use oc" public funds. See Mannheim v. 
Superior Court (197Q) 3 Cal.3d G7a, 690-591. In this instance, 
the Friends are proposing to sell Cicy property £or a price. 
however small. Because off the prohibition against gi£t3 of 
public funds, the monies earned by the Friends from the sale of 
the surplus volumes tnuat be used for public oanafie. X 
understand that it is the ret ends' intention to expend the funds 
earned from the sale of the surplus volumes to benefit Library 
programs. I believe that tnis arrangement would overcome any 
obstacle imposed by the statutory prohibition against gifts of 
public property. 

In summary, I conclude that you may contract with the 
Friends of the Public Library for disposal of the subject Library 
volumes, on the condition that the funds derivea from the sale 
and disposal of the volumes be spent to benefit programs of the 
San Francisco Public Library. 

Thank you for you inquiry. Please do not hesitaf-.a to 
contact me if you should have other questions or concerns. 

Very truly yours, 

LOUISE H. RENNE 

City Attorney 




Deputy City Attorney 



JTE/dls 

cc: Robert Tecco, Purchaser's Office 

Jana Winslow, Friends of the Pub Lie Library 



84 



DEC -83-2002 14=30 



415 55? 4239 ?&'/. P- 05 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



Item 12 - File 02-1980 

Department: 

Item: 



Amount: 
Source of Funds: 



Description: 



Mayor's Office of Community Development (MOCD) 

Hearing to request release of reserved funds in the 
amount of $419,000 to be used to construct the interior 
portion of the Training Center space at the Evans 
Campus of San Francisco Community College District. 

$419,000 

Funds reserved by the Board of Supervisors in the Fiscal 
Year 1998-1999 Community Development Block Grant 
(CDBG) budget. 

In February of 1998, MOCD budgeted a FY 1998-1999 
CDBG Work Force Development Pool allocation of 
$2,000,000. $1,909,331, or approximately 95 percent, of 
those funds were made available for individual Workforce 
Development projects 1 . The Board of Supervisors placed 
all of the $1,909,331 for such projects on reserve pending 
submission by MOCD of expenditure plans and budget 
details for specific Work Force Development projects. 

On September 20, 2000, the Finance Committee 
considered a request by the MOCD to release $500,000 of 
the subject reserved funds which would be used by the 
San Francisco Community College District (SFCCD) to 
construct the interior portion of the Training Center space 
at the Evans Street Campus, located at 1400 Evans 
Street. The Finance Committee released $81,000 of the 
$500,000 for Architectural and Engineering services, 
blueprints and permits, and continued to reserve the 
$419,000 balance pending selection of a construction 
contractor. 

This proposed project was to be part of a larger capital 
improvement project for the SFCCD's Maritime and 
Construction Skills Training Center. The source of funds 
for the SFCCD capital improvement project was to be the 
$500,000 in MOCD funding and up to approximately 



1 The remaining $90,669, or approximately 5 percent, of these funds was expended to cover 
administration costs. 

Board of Superviors 
Budget Analyst 
85 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



$2,000,000 from SFCCD bond funds approved by the 
voters in November of 2001 (Proposition A) in the amount 
of $195,000,000. On March 27, 2002, the SFCCD 
conducted a first bond, sale in the amount of $38,000,000, 
to begin its capital improvement program. 

The SFCCD did not use the $81,000 in MOCD funds 
previously released by the Board of Supervisors for 
Architectural and Engineering services, blueprints and 
permits, and instead funded such expenditures from the 
Proposition A bond proceeds. SFCCD therefore now 
requests that the entire $500,000, the $419,000 in 
remaining MOCD reserved funds and the $81,000 in 
previously released funds, be used for project 
construction. 

The SFCCD advertised the Invitation For Bids for the 
construction of the proposed project in August and 
September of 2002. Ten bids were received. The bidders 
and amounts bid for the project are shown in the table 
below: 

HJ Integrated System $ 3,095,825 

Rubecon 2,721,130 

AR Construction Co. 2,617,357 

Kin Wo Construction 2,601,000 

Alpha Bay Builders 2,524,128 

Seto Construction 2,489,000 

Angotti Riley 2,438,000 

JIN Construction 2,406,860 

Ruiz Construction 2,281,874 

Evra Construction 2,233,400 

According to Mr. Harry Baker, of MOCD, on October 25, 
2002, the day bids were opened, Evra Construction, the 
lowest bidder, withdrew their bid due to a calculation 
error. The SFCCD then awarded the construction contract 
to Ruiz Construction, the next lowest bidder. 



Board of Superviors 
Budget Analyst 

86 



Memo to Finance Committee 

December 11, 2002 Finance Committee Meeting 



Budget: 



The Attachment to this report, provided by Mr. Peter 
Goldstein, Vice Chancellor for Administration for the 
SFCCD, provides details for the total construction budget 
of $2,281,874. 

A summary budget provided by Mr. Baker for the 
$500,000 in MOCD funds ($419,000 in the subject 
requested reserved funds and $81,000 in funds previously 
released for expenditure by the Finance Committee) 
would be used to construct certain interior portions of the 
new Training Center as follows: 

Introduction to Construction Trades 2nd floor $112,000 

Construction Laboratory 2nd floor 112,000 

Instructor's Office 2nd floor 850 

Tool Storage 1,950 

Material Storage 1st floor 28,000 

Mechanical Drawing/CAD Classroom 92,000 

Building/Electrical/Plumbing Classroom 53,600 

Electrical Wiring/Custodial Classroom 56,000 

Outdoor Construction Area 43.600 

Total $500,000 



Comment: 



According to Mr. Goldstein, the new Training Center, 
once completed, would allow the SFCCD to offer certified 
trade training and curricula to individuals seeking 
employment or advancement in the construction and 
maritime trades. The facility would also be used to 
provide employment support services for individuals 
enrolled in construction and maritime skills training at 
City College. 



Recommendation: 



Approve the requested release of $419,000 in reserved 
funds. 



Board of Superviors 
Budget Analyst 



Memo to the Finance Committee 

December 11, 2002 Finance Committee Meeting 



cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 




BOARD OF SUPERVISORS 
BUDGETgANALYST 



Attachment 



San Francisco Community College District 
Evans Campus (MOCD & Seismic Upgrade) 



Trade 


Contact 




Amount 


Building Moving Wrecking 


$ 30,240 


Earthwork and Paving 


8,616 


Utility Products 


19,425 


Concrete Contracting 


108,418 


Structural Steel Contractors 


60,930 


Construction Misc 


42,056 


Insulation/Acoustical 


26,725 


Roofing 


365,000 


Hazmat taken out of roofing above 


7,500 


Sheet Metal Contracting 


15,000 


Door Installation 


51,550 


Glazing 


10,000 


Drywall 


169,456 


Flooring Services 


14,600 


Painting/Decorating 


30,000 


Signs, Directional 


1,750 


Construction Equipment 


21,000 


Buildings Prefabricated 


- 


Plumbing 


44,280 


Warm Air Heating, Ventilating 


610,000 


Electrical Contracting 


381.900 


Subtotal 


$2,018,446 


Subguard 


21,194 


Payroll Taxes 


6,055 


Subtotal 


2,045,695 


General Conditions 


143,199 


Subtotal 


2,188,893 


Fee 


65,667 


Bond 


27.314 


TOTAL 


$ 2,281,874 



SOURCE : SAN FRANCISCO COMMUNITY COLLEGE DISTRICT 



ST5? 



City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 
Clerk: GailJohnson 



City Hall 
1 Dr. Carlton B 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, December 18, 2002 



12:30 PM 
Regular Meeting 



City Hall, Room 263 



Members Present: Aaron Peskin, Sophie Maxwell. 
Members Absent: Chris Daly. 



MEETING CONVENED 



The meeting convened at 12:36 p.m. 
022012 (Current Financial State of San Francisco Airport] 
Supervisor Peskin 

Hearing to review the current financial state of San Francisco Airport and contingencies that it will implement 
as a result of the recently declared bankruptcy of its major tenant, United Airlines. 

12/9/02, RECEIVED AND ASSIGNED to Finance Committee. Sponsor requests this item be scheduled for consideration at the 
December 18, 2002 meeting. 

Heard in Committee. Speakers: John Martin, Airport Director; Eileen Bokin, SPEAK; Nancy Wuerfel. 
CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



02201 1 [State of California Budget Cuts] 
Supervisors Peskin, Daly 

Hearing to receive a briefing from the Mayor's Budget Director on recent information on State of California 
budget cuts and their impact on City and County of San Francisco's budget. 

12/9/02, RECEIVED AND ASSIGNED to Finance Committee. Sponsor requests this item be scheduled for consideration at the 
December 18, 2002 meeting. 

Heard in Committee. Speakers: Ben Rosenfield, Mayor's Budget Office; Marcia Rosen, Executive Director, 

Redevelopment Agency. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



City and County of San Francisco 



Printed at 12:01 I'M on .1.1/0 J 



Finance Committee 



Meeting Minutes 



December 18, 2002 



021839 [Redevelopment Agency Budget Amendment for Fiscal Year 2002-2003] 

Resolution approving an amendment to the Budget of the Redevelopment Agency of the City and County of 
San Francisco for Fiscal Year 2002-2003 by increasing the Agency's expenditure authority in an amount not to 
exceed $43,100,000; authorizing the Agency's issuance of Tax Allocation Bonds, in one or more series, each in 
either Variable Rate or Fixed Rate Mode, in an amount not to exceed $43,100,000; authorizing the Agency's 
receipt of additional Tax Increment necessary to repay the principal and interest on said bonds; and approving 
a Cooperation and Tax Increment Reimbursement Agreement with the Agency with respect to the Yerba Buena 
Center Redevelopment Project Area; and authorizing an agreement between the Agency and the Parking 
Authority pertaining to the operation of the proposed Jessie Square Garage. (Redevelopment Agency) 

(Fiscal impact.) 

1 1/14/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at the 

December 4, 2002 meeting. 

12/4/02, AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. Speakers: None. 

1 2/4/02, CONTINUED TO CALL OF THE CHAIR AS AMENDED. 

Heard in Committee. Speakers: Marcia Rosen, Executive Director, Redevelopment Agency; William Carney; 

Senior Project Manager, Yerba Buena Center Redevelopment Project Area, Redevelopment Agency; Harvey 

Rose, Budget Analyst; John Kalacke, Yerba Center for the Arts; Connie Wilfoe, Magnes Museum; William 

Moreno, Trustee, Mexican Museum; Mario Garcia, Director, Yerba Buena Garden Festival; Ms. Rodriguez, 

Univision, Channel 14; Anita Hill, Executive Director, Yerba Buena Alliance; Don Marcos, Director, Mission 

Hiring Hall; Joe Brennan, San Francisco Museum of Modern Art and Yerba Buena Alliance; Salvador 

Asavaro, Mexican Museum; Male Speaker, Mexican Museum; Mr. Lopez. 

RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021804 [Garbage Collection Truck Licensing Fee] 

Ordinance increasing the licensing fee for garbage trucks and the amount deposited into the Mandatory Refuse 
Collection Service Fund by amending Section 249.6 of the San Francisco Business and Tax Regulations Code 
and Section 10.100-7 of the San Francisco Administrative Code and ratifying past actions taken in connection 
with such licensing fee. (Public Health Department) 

(No Public Benefit Recipient.) 

10/21/02, ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 1 1/20/2002. 

1 1/20/02, CONTINUED. Speakers: None. 

Continued to 12/4/02. 

12/4/02, CONTINUED. Speakers: None. 

Continued to 12/18/02. 

Heard in Committee. Speakers: Jack Breslin, Department of Public Health, Occupational and Environmental 

Health Section; Harvey Rose, Budget Analyst: Ben Rosenfield, Mayor's Budget Office. 

Amended on page 2 as follows: 

on line 18, by replacing "Director of Administrative Services" with "Department of Public Health;" 

on lines 18 and 19, by replacing "a quarterly" with "an annual;" 

on lines 19 and 20, by deleting "the Mayor, the Board of Supervisors ; " 

on line 20, by deleting "and the Budget Analyst. " 

Further amended on page 2, line 21. by adding "The Mandatory Refuse Collection Service Fund shall sunset 

on June 30. 2003. Revenues and expenditures associated with said fund shall be transferred to the General 

Fund to be appropriated annually by the Board of Supervisors for the purposes specified herein. " 

AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



City and County of San Francisco 



Printed at 12:01 PM 



Finance Committee 



Meeting Minutes 



December 18,2002 



021856 [Providing for a new complaint procedure for the enforcement of the prevailing wage requirements] 
Supervisors Ammiano, Peskin, Maxwell, Daly, McGoldrick, Dufty 

Ordinance adding Subsection 6.24(C) to San Francisco Administrative Code, Chapter 6, Article II, Section 

6.24 to establish a procedure for the Labor Standards Enforcement Officer's administration of complaints in the 

enforcement of prevailing wage requirements. 

1 1/4/02, ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 12/4/2002. 

Heard in Committee. Speaker: Donna Levitt. 

(Supervisors Peskin and Maxwell added as co-sponsors.) 

RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021919 [Treasure Island Development Authority Cooperative Agreement with U.S. Navy] 

Resolution approving and authorizing the Treasure Island Development Authority to enter into the 15th 
modification to the Cooperative Agreement with the United States Navy to extend the Cooperative Agreement 
from October 1, 2002 to September 30, 2003. (Mayor) 

(Fiscal impact.) 

1 1/18/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Annemarie Conroy, Executive Director. Treasure Island Development 

Authority. 

Amended on page 1, line 4, after "agreement, " on page 2, line 15, after "approves, " and on page 2, line 16, 

after "authorizes, " by adding "retroactively. " 

AMENDED. 

Resolution approving and authorizing the Treasure Island Development Authority to enter into the 15th 

modification to the Cooperative Agreement with the United States Navy to extend the Cooperative Agreement 

retroactively from October 1, 2002 to September 30, 2003. (Mayor) 

(Fiscal impact.) 

(No Public Benefit Recipient.) 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 
Absent: 1 - Daly 



021911 [MOU, H-l Fire Rescue Paramedics. Local 790] 
Mayor 

Ordinance adopting and implementing the mediated agreement establishing the terms of the Memorandum of 

Understanding between the Service Employees International Union, Local 790 for H-l Fire Rescue Paramedics 

and the City and County of San Francisco to be effective for the period July 1, 2001 through June 30, 2003. 

(Mayor) 

1 1/18/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Alice Villagomez, Deputy Director, Employee Relations Division, 

Department of Human Resources; Harvey Rose, Budget Analyst: Larry Bradshaw, Service Employees 

International Union, Local 790, Paramedics. 

Amended on page 1, line 3, by deleting "the mediated agreement establishing. " 

AMENDED. 



City and County of San Francisco 



Printed at 12:1)1 r.\t on 3/3/04 



Finance Committee 



Meeting Minutes 



December 18, 2002 



Ordinance adopting and implementing the terms of the Memorandum of Understanding between the Service 
Employees International Union, Local 790 for H- 1 Fire Rescue Paramedics and the City and County of San 
Francisco to be effective for the period July 1, 2001 through June 30, 2003. (Mayor) 
RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021942 [Reserved Funds, Fire Department] 

Hearing to consider release of reserved funds, Fire Department (Ordinance No. 127-96, 1986 Fire Protection 

Bonds), in the amount of $2,039,000 for the installation of five (5) motorized valves essential to control the 

flows and pressures and preserve the integrity of the AWSS system in the event of a main failure. (Fire 

Department) 

12/2/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: PaulJones, Assistant Deputy Chief, Division of Support Services, Fire 

Department; Jim Corrigan. 

Release of reserved funds in the amount of $2,039,000 approved. 

APPROVED AND FILED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021 966 [Reserved Funds, Fire Department] 

Hearing to consider release of reserved funds, Fire Department fiscal year 2002-2003 budget, in the amount of 
$322,277 for salaries of five training officers (three H-39 Training Captains and two H-43 EMS training 
Section Chiefs). These positions provide the medical and fire training needed to fulfill the mission of the Fire 
Department in saving lives and property. (Fire Department) 
12/4/02, RECEIVED AND ASSIGNED to Finance Committee. 
Heard in Committee. Speaker: Jim Corrigan. 
Continued to 1/15/03. 
CONTINUED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021876 [Real Property Lease Option] 

Resolution authorizing the exercise of an extension option at 875 Stevenson Street for various City 
departments. (Real Estate Department) 

(Fiscal impact; No Public Benefit Recipient.) 

1 1/19/02, RECEIVED AND ASSIGNED to Finance Committee. 

Speakers: None. 
Continued to 1/15/03. 
CONTINUED by the following vote: 

Ayes: 2 - Peskin, Maxwell 
Absent: 1 - Daly 



City and County of San Francisco 



Printed at 12:01 PM on 3/3/04 



Finance Committee 



Meeting Minutes 



December 18, 2002 



[Amendment to the Operating Agreement for the Moscone Convention Center] 

Resolution authorizing the Director of Convention Facilities to execute an amendment to the operating 
agreement increasing the agreement from $15,015,100.00 to $15,844,209.00. (Administrative Services 
Department) 

(Fiscal impact; Public Benefit Recipient.) 

1 1/20/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Jack Moerschbacher; Pisheir Astanda, Janitors Union; Sonia Obtero; 

Har\'ey Rose, Budget Analyst. 

RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021975 [Accept-Expend Regional Grant] 
Supervisors Peskin, Daly 

Resolution authorizing the Airport Commission to accept and expend five (5) grants totaling $1,089,000 from 
the Bay Area Air Quality Management District (Air District) for acquisition of clean air vehicles by Airport 
transportation operators. (Airport Commission) 

(Public Benefit Recipient.) 

12/4/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speaker: Diana Hammons, Department of Parking and Traffic. 

Supervisor Peskin added as sponsor. 

RECOMMENDED., by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021939 [Extension of Agreement with City Carshare] 
Supervisors Peskin, Maxwell, Newsom, Daly 

Resolution authorizing a six month extension to the existing grant agreement between the City and County of 
San Francisco and City Carshare. (Parking and Traffic Department) 

(No Public Benefit Recipient.) 

1 1/27/02, RECEIVED AND ASSIGNED to Transportation and Commerce Committee. 

12/6/02, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: Diana Hammons, Department of Parking and Traffic; Elizabeth Sullivan. 

(Supervisors Peskin and Maxwell added as co-sponsors.) 

RECOMMENDED., by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



City and County of San Francisco 



Printed at 12:01 I'M 



Finance Committee 



Meeting Minutes 



December 18, 2002 



021978 [California Healthcare for Indigents Program (CHIP) funds for Fiscal Year 2002-03] 
Supervisors Maxwell, Daly 

Resolution authorizing adoption of the County Description of Proposed Expenditure of California Healthcare 
for Indigents (CHIP) funds for Fiscal Year 2002-03 and that the President or duly authorized representative of 
the Board of Supervisors of the City and County of San Francisco can certify the County Description of 
Proposed Expenditure of CHIP funds for the Fiscal Year 2002-03. (Public Health Department) 

(No Public Benefit Recipient.) 

12/4/02, RECEIVED AND ASSIGNED to Health and Human Services Committee. 

12/1 1/02, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: JeffLeong, Department of Public Health. 

(Supervisor Maxwell added as sponsor.) 

RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021984 [HIV Care and Related Services for Women and Minorities] 
Supervisor Daly 

Resolution authorizing the San Francisco Department of Public Health (SFDPH) AIDS Office (AO) to accept 
and expend retroactively the second year of a grant in the amount of $650,000 from the DHHS Office of 
Minority Health (DHHS OMH) to improve AIDS related health outcomes for women and minorities and to 
enter into an agreement for the use of these funds; for the period of September 30, 2002 to September 29, 
2003. (Public Health Department) 

(Public Benefit Recipient.) 

1 2/1 1/02, RECEIVED AND ASSIGNED to Health and Human Services Committee. Department requests this item be scheduled for 

consideration at the December 19, 2002 meeting 

12/12/02, TRANSFERRED to Finance Committee. 

Speakers: None. 

Continued to 1/15/03. 

CONTINUED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly V. 



ADJOURNMENT 



The meeting adjourned at 3:10 p.m. 



City and County of San Francisco 



Printed at 12:02 PM on 3/3/04 




[Budget Analyst Report] 
Susan Horn 
city and county lI'^^PIJI/ OF s A Nf FRj Main Library-Govt. Doc. Section 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 

December 12, 2002 

TO: -Finance Committee DOCUMENTS DEPT 

FROM: .Budget Analyst 



SUBJECT: December 18, 2002 Finance Committee Meeting 
Item 3 -File 02-1839 



DEC 1 7 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



Note: This resolution was continued by the Finance Committee at its meeting of 
December 4, 2002. The Budget Analyst recommended that the proposed 
resolution be continued so that the Cooperation and Tax Increment 
Reimbursement Agreement to be approved by the Board of Supervisors under 
this proposed resolution could be rewritten to clearly specify that a) the City's 
General Fund (as opposed to "the City") is fully reimbursed for tax increment 
revenue diverted from the General Fund to repay the debt service on the 
proposed Redevelopment Agency Tax Allocation Bonds, and b) the City's 
General Fund will receive reimbursements which include the amounts which 
would normally accrue in the City's General Fund and those which would 
normally accrue to other taxing entities, including the SFUSD and the 
SFCCD. The Budget Analyst further recommended that the City Attorney 
and the Controller certify that the amended language of the Cooperation and 
Tax Increment Reimbursement Agreement is clear and sufficient to 
accomplish the stated intent of the agreement. This report is based on an 
amended resolution and the amended version of the Cooperation and Tax 
Increment Reimbursement Agreement submitted by the Redevelopment 
Agency. 

Department: Redevelopment Agency 

Item: Resolution approving an amendment to the budget of the 

Redevelopment Agency of the City and County of San 
Francisco for Fiscal Year 2002-2003 by (a) increasing the 
Redevelopment Agency's Expenditure Authority in an 
amount not to exceed $43,100,000; (b) authorizing the 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Redevelopment Agency's issuance of Tax Allocation 
Bonds, in one or more series, each in either variable or 
fixed rate mode, in an amount not to exceed $43,100,000; 
(c) authorizing the Redevelopment Agency's receipt of 
additional tax increment monies necessary to repay the 
principal and interest on said bonds; and (d) approving a 
Cooperation and Tax Increment Reimbursement 
Agreement 1 between the City and the Redevelopment 
Agency with respect to the Verba Buena Center 
Redevelopment Project Area. 



Amount: 



Not to exceed $43,100,000 



Source of Funds: 



Tax Allocation Bonds 



Description: 



Under the proposed resolution, (a) the Redevelopment 
Agency would issue Tax Allocation Bonds in an amount 
not to exceed $43,100,000, to finance improvements at 
Jessie Square, including construction of the Jessie Square 
open space, the Jessie Square Parking Garage, and 
improvement to the substructures and the foundations of 
the proposed Mexican Museum and Magnes Museum as 
part of the Redevelopment Agency's Yerba Buena Center 
Redevelopment Project Area; (b) increase the 
Redevelopment Agency's expenditure authority for the FY 
2002-2003 budget in an amount not to exceed 
$43,100,000; (c) approve authorization of the 
Redevelopment Agency's receipt of additional tax 
increment revenues necessary to repay the principal and 
interest on the Tax Allocation Bonds commencing in FY 
2004-2005; and (d) approve a Cooperation and Tax 



1 Approval of the proposed resolution would create a Cooperation and Tax Increment Reimbursement 
Agreement between the Redevelopment Agency and the City. This agreement sets obligations 
regarding the use of the Jessie Square Parking Garage revenues and repayment of tax increment 
revenues. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Increment Reimbursement Agreement between the City 
and the Redevelopment Agency with respect to the Yerba 
Buena Center Redevelopment Project Area. 

The Redevelopment Agency's authority to issue the 
proposed 343,100,000 in Tax Allocation Bonds comes from 
Article XVI, Section 16 of the California Constitution and 
Sections 33640 and 33670 of the California Health and 
Safety Code (the Community Redevelopment Law). Under 
Sections 33640 and 33670 of the Community 
Redevelopment Law, the Redevelopment Agency is 
authorized to issue Tax Allocation Bonds to pay for the 
cost of financing construction of improvements for its 
redevelopment projects. 

According to Mr. Mario Menchini of the Redevelopment 
Agency, the general provisions of the sale of the Tax 
Allocation Bonds would be as follows: (a) the sale of the 
first series bonds is tentatively scheduled for March 14, 
2003; (b) the sale of the second series bonds is tentatively 
scheduled for March 31, 2003; (c) the bonds would be 
issued at a fixed interest rate not to exceed 8.0 percent; 
and (d) the final maturity date of the subject bonds will be 
August 1, 2018. 

The subject Tax Allocation Bonds would be used to 
partially fund construction of Jessie Square, a new Jessie 
Square Parking Garage, and construction of the 
foundations of the proposed Mexican Museum and the 
proposed Magnes Museum. Jessie Square, on block CB-1 
(Assessor's Block 3706), is located on the north side of 
Mission Street, between Third and Fourth Streets. The 
proposed project includes construction of a 161,600 square 
feet underground parking garage, with approximately 450 
parking spaces. The proposed underground parking 
garage would be partially under (a) the proposed Mexican 
Museum, (b) the proposed Magnes Museum, and (c) the 
Jessie Square open space facing Mission Street. The 
proposed Jessie Square Garage, a four level underground 
parking garage, would contain approximately 450 parking 
spaces, of which 65 to 70 parking spaces will be leased by 
the developer, Millennium Partners, for 30 years (See 
Comment No. 5) 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Improvements to the Yerba Buena Center Redevelopment 
Area, which will include Jessie Square, include 
pedestrian-oriented gardens, cultural, recreational, 
convention and retail attractions. The design of Jessie 
Square open space includes pedestrian linkages to Yerba 
Buena Lane and Third Street, as well as access to the 
Magnes Museum, the Mexican Museum, and St. Patrick's 
Church. The proposed improvements include stone 
paving, performance areas, fixed and cafe style seating, 
trees, lighting, and an artist-designed water feature. The 
proposed project also includes reinforcement and 
improvements to the substructures of the Magnes 
Museum and the Mexican Museum, since part of the 
proposed Jessie Square Garage will be located below the 
museums. 

The total estimated project costs will be $42,309,624, as 
shown in Attachment I, provided by the Redevelopment 
Agency. In addition to the $34,900,000 in construction 
fund proceeds from the Tax Allocation Bonds, the balance 
of the total project cost of $7,409,624 ($42,309,624 less 
bond financing of $34,900,000) for the proposed Jessie 
Square Garage and improvements will be financed in the 
following manner: (a) $4,529,624 from the sale of 
Transferable Development Rights (TDR) (see Attachment 
II) of the Jessie Square Substation and the historic 
Planters Hotel; (b) $380,000 from proceeds from the sale 
of Redevelopment Agency land to the Magnes Museum; 
and (c) $2,500,000 in developer equity. Attachment II is a 
memorandum provided by the Redevelopment Agency 
that explains how the sale of Transferable Development 
Rights would provide monies for the proposed project. 
According to Mr. Carney, the $4,529,624 in TDRs will be 
provided from the following sources (a) $3,420,000 from 
the sale of TDR to Millennium Partners from the historic 
Jessie Square Substation Building owned by the 
Redevelopment Agency, (b) $629,624 from an additional 
sale of Jessie Square Substation TDR to Millennium 
Partners; and (c) $480,000 would be from the sale, by 
Millennium Partners, of TDR from the historic Planters 
Hotel; such TDR have been donated by the owner of the 
Planters Hotel, located at 600 Folsom Street, to the 
Magnes Museum which has agreed to convey the TDR to 
the Redevelopment Agency for this purpose. (See 
Comment No. 3). 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

4 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

The proposed resolution would authorize approval of a 
Cooperation and Tax Increment Reimbursement 
Agreement between the City and the Redevelopment 
Agency. An amended version of the Cooperation and Tax 
Increment Reimbursement Agreement was submitted to 
the Finance Committee on December 4, 2002. The 
Cooperation and Tax Increment Reimbursement 
Agreement obligates the Redevelopment Agency to 
reimburse the City for all tax increment revenues which 
would be used to pay the debt service of the Tax 
Allocation Bonds. Under the terms of the proposed 
Cooperation and Tax Increment Reimbursement 
Agreement, the Redevelopment Agency will establish a 
separate "Garage Fund" where all parking revenues from 
the Jessie Square Garage will be deposited. The 
Redevelopment Agency will use a combination of parking 
revenues from the proposed garage and Parking Tax 
revenues from the proposed garage to reimburse the 
City's General Fund (See Comment No. 1). 

Budget: Attachment I, provided by the Redevelopment Agency, 

includes a summary budget, which identifies both the 
revenue sources and expenditures for the proposed 
project. As previously noted, total project costs are 
$42,309,624, including $15,241,105 for the Jessie Square 
improvements and $27,068,519 for the Jessie Square 
Parking Garage, as shown in Attachment I. Attachment I 
also contains funding (budget) sources for the proposed 
project expenditures of $42,309,624. According to Mr. Bill 
Carney of the Redevelopment Agency, the reason the 
issuance of the Tax Allocation Bonds is not to exceed 
$43,100,000, or $790,376 more than the estimated total 
project cost of $42,309,624, is because the Redevelopment 
Agency wanted to maintain flexibility and minimize the 
impact on the City's General Fund in the event the sale of 
TDRs did not realize all anticipated revenues. 

As shown in Attachment III, provided by the 
Redevelopment Agency, $34,900,000 of the $43,100,000 
Tax Allocation Bonds are estimated to be available for the 
proposed project. The difference of $8,200,000 
($43,100,000 less $34,900,000) is the estimated costs of 
issuance of the bonds, the underwriter's discount, funding 
of a capitalized interest fund (to pay interest costs before 
the project begins producing revenue), bond insurance, 
and a reserve account, which is a reserve fund for debt 
service for the proposed Tax Allocation Bonds. According 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

to Mr. Menchini, these costs include 16 months of 
capitalized interest on the bonds for the cultural and open 
space portion of the project, 30 months of capitalized 
interest on the bonds for the Jessie Square Garage 
portion of the project, and a debt service reserve of 10 
percent that could be used to pay for the final year of debt 
service on the Tax Allocation Bonds. The details for the 
$8,200,000 are shown in Attachment III. 

Comments: 1. According to Mr. Menchini, the Tax Allocation Bonds 

would be repaid from tax increment revenues, of which 
approximately 65 percent would normally accrue to the 
City's General Fund. According to Mr. Menchini, the use 
of tax increment revenues to service the debt on the Tax 
Allocation Bonds would not begin until Fiscal Year 2004- 
2005, since the Redevelopment Agency will have sufficient 
funds for capitalized interest to pay bond debt service 
through FY 2003-2004. Under the proposed Cooperation 
and Tax Increment Reimbursement Agreement, between 
the City and the Redevelopment Agency, the 
Redevelopment Agency will reimburse the City for all tax 
increment revenues used for debt service, through 
biannual payments to the City during the period of 2005 
through 2021. Such reimbursements will include amounts 
which would normally accrue in the City's General Fund 
(approximately 65 percent of the total tax increment 
revenues to be provided for debt service) and those which 
would normally accrue to other taxing entities, such as 
Property Tax proceeds otherwise payable to the San 
Francisco Unified School District (SFUSD) and the San 
Francisco Community College District (SFCCD), 
according to Mr. Menchini. 

Under the proposed amended version of the Cooperation 
and Tax Increment Reimbursement Agreement, the 
General Fund would be reimbursed for the full amount of 
the debt service for the Tax Allocation Bonds. Such 
reimbursements to the City would be paid from parking 
revenues, Possessory Interest Taxes, and Parking Taxes 
generated by the proposed Jessie Square Garage by 
December 31, 2018. Under the terms of the Cooperation 
and Tax Increment Reimbursement Agreement, any 
shortfalls in revenues, which would normally accrue in 
the City's General Fund, by the Redevelopment Agency to 
make the General Fund whole will be repaid with interest 
at an annual compounded rate of five percent until the 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Redevelopment Agency's reimbursement obligation is 
satisfied. 

2. According to Mr. Menchini, the Redevelopment Agency 
expects to issue the proposed Tax Allocation Bonds in two 
series, on March 14, 2003 and March 31, 2003. Mr. 
Menchini advises that the Tax Allocation Bonds would 
have a fixed interest rate, not to exceed eight percent. 
Attachment IV, provided by Mr. Menchini, shows the debt 
service schedule for the proposed Tax Allocation Bonds. 
As shown in Attachment IV, the total debt service over 14 
years is $52,888,997, or an average annual debt service of 
$3,777,785. 

3. As shown in Attachment I, $4,529,624 for the proposed 
project will be generated from TDR sales. According to 
Mr. Carney, the applicable sales have not yet occurred, 
although they are required by Redevelopment Agency 
Disposition and Development Agreements now in place. 
Mr. Carney further advises that for the TDR sales to 
occur, the City's Planning Code and the City's General 
Plan Downtown Element must be amended, because the 
transfer of such development rights would be between 
different zoning districts (from a C-3-R, or Downtown 
Retail zoning district to a C-3-O, or Downtown Office 
zoning district). Such transfers are presently not 
permitted in either the Planning Code or the Downtown 
Element of the City's General Plan. Currently, two 
ordinances (File Nos. 02-0327 and 02-0328) are pending 
before the Board of Supervisors Transportation and 
Commerce Committee, which would amend the Planning 
Code and the Downtown Element to permit the necessary 
TDR sales to occur. According to Mr. Carney, if the 
pending ordinances amending the Downtown Element 
and the Planning Code (File Nos. 02-0327 and 02-0328) 
are not approved by the Board of Supervisors, the 
Redevelopment Agency will attempt to sell the TDRs for 
use in a C-3-R zoning district which is permitted under 
the current City Planning Code and Downtown Elemen. 
of the City's General Plan. Mr. Carney advises that if the 
pending ordinances are not approved by the Board of 
Supervisors, the TDR revenue could be less than the 
$4,529,624 estimated in Attachment I, since the proposed 
project TDR sales, to Millennium Partners, are above 
current market value. Therefore, the Budget Analyst 
notes that all of the financing sources for the proposed 
Project have not yet been secured. Because such financing 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



sources would be dependent on Board of Supervisors 
approval of pending legislation, the Budget Analyst 
considers approval of the proposed resolution to be policy 
matter for the Board of Supervisors. 

4. According to Mr. Carney, Millennium Partners was 
selected through a Request for Proposals process in 1995 
to develop the Redevelopment Agency's CB-1 Market 
Street parcel, which included the Four Seasons Hotel and 
Condominiums and related retail development. The 
Disposition and Development Agreement negotiated with 
Millennium Partners as a result of the RFP included the 
potential for the development to include a parking garage 
under Jessie Square, with the construction of the Square 
and foundations for the adjacent cultural facilities. 
According to Mr. Carney, the General Contractor portions 
of the proposed project was put out to bid by Millennium 
Partners, assisted by the Redevelopment Agency's 
Contract Compliance Division through a Request for 
Qualifications (RFQ) process to select the construction 
General Contractor. According to Mr. Carney, Plant 
Construction/Ruiz Construction Company will serve as 
the General Contractor for the construction of the Project. 
According to Mr. Carney, the design architect for the 
Project is Gary Handell Associates, which was selected by 
Millennium Partners, in accordance with the contract 
compliance provisions of the Disposition and Development 
Agreement (DDA) between the Redevelopment Agency 
and Millennium Partners. Gary Handell Associates was 
selected because of their extensive experience, technical 
ability, and understanding of the Yerba Buena Center 
Redevelopment Project Area advises Mr. Carney. Mr. 
Chris Inglesias of the Redevelopment Agency provided 
Attachment VI, which contains a list of the bidders for the 
General Contractor and the selection process for the 
General Contractor and the design architect for the 
proposed Jessie Square Project. According to Mr. Carney, 
the proposed budgeted amounts for work to be 
constructed by the General Contractor and their 
subcontractors is $30,451,623. 

5. Millennium Partners, the developer of the Jessie 
Square Project, entered into a Disposition and 
Development Agreement (DDA) with the Redevelopment 
Agency. Under the DDA with the Redevelopment Agency, 
approximately 65 to 70 of the 450 parking spaces in the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



proposed Jessie Square Garage will be leased, for 30 
years, to the developer, Millennium Partners. According 
to Mr. Carney, the Disposition and Development 
Agreement was not subject to Board of Supervisors 
approval but was subject to Redevelopment Agency 
Commission approval. According to Mr. Carney, the 
spaces leased will be located at the top, or mezzanine, 
level of the Jessie Square Garage. According to Mr. 
Carney, Millennium Partners will pay a minimum of 
$689,000 per year to the Redevelopment Agency for up to 
approximately 70 spaces (70 spaces @ $7,700 per space, 
per year, plus $150,000 per year for financing premiums). 

6. As explained in Attachment VII, provided by Mr. 
Menchini, the Redevelopment Agency will provide a 
record for all garage financial transactions, provide the 
City with net garage revenues, and the remaining 
Redevelopment Agency obligations to the City, and the 
Redevelopment Agency will work with the Controller's 
Office to determine the amount of the tax increment 
revenues which the Redevelopment Agency has been 
reimbursing the City's General Fund. 

7. The amended version of the proposed Cooperation and 
Tax Increment Reimbursement Agreement Cooperation 
and Tax Increment Reimbursement Agreement has been 
reviewed by both the City Attorney and the Controller. As 
recommended by the Budget Analyst, both the City 
Attorney and the Controller have certified that a) the 
City's General Fund will be fully reimbursed for tax 
increment revenue diverted from the General Fund to 
repay the debt service on the proposed Redevelopment 
Agency Tax Allocation Bonds, and b) the City's General 
Fund will also receive reimbursements which include the 
amounts which would normally accrue in the City's 
General Fund and those which would normally accrue to 
other taxing entities, including the SFUSD and the 
SFCCD. As shown in Attachment IV, the Redevelopment 
Agency's projections estimate that the General Fund will 
receive surplus reimbursement revenues in the amount of 
$16,149,139 by 2020. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Recommendations: Approval of the proposed resolution is a policy matter for 
the Board of Supervisors because $4,529,624 for the 
proposed project will be generated from Transferable 
Development Rights (TDR) sales that would only be 
permitted if pending legislation to amend the Planning 
Code and the Downtown Element to permit the necessary 
TDR sales to occur are approved by the Board of 
Supervisors. The pending ordinances (File Nos. 02-0327 
and 02-0328) have been referred to the Board of 
Supervisors Transportation and Commerce Committee 
and have not yet been scheduled for a hearing (see 
Comment 3). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Attachment I 



JESSIE SQUARE IMPROVEMENTS 
PROJECT SOURCES & USES SUMMARY 



11/1/2002 



BUDGET SOURCES 



Tax Allocation Bond Proceeds* 

Garage Portion 

Public Improvements Portion 

Land Sale 

Pavilion Parcel Sale 

Transferable Development Rights (TDR) 

Basic Substation TDR Sale 
Additional Subsation TDR Sale 
Planters Hotel TDR Sale 

Developer Equity Contribution 

Pre-development sunk costs 

Total Budget Sources 



$20,200,000 
$14,700,000 


$ 


34,900,000 


$ 380,000 


$ 


380,000 


$ 3,420,000 
$ 629,624 
$ 480,000 


$ 


4,529,624 


$ 2,500,000 


$ 


2,500,000 




|$ 


42,309,624 | 



BUDGET USES 



Public Improvements 








Jessie Square 


$ 3,733,664 






Magnes Museum Substructure & Preservation 


$ 6,291,074 






Mexican Museum Substructure 


$ 5,216,367 


$ 


15,241,105 


Garage Improvements 








Garage 


$24,689,660 






Garage Elevator Structure @ St. Patrick's 


$ 495,428 






Garage Truck Loading Area @ Argent 


$ 1,883,431 


$ 


27,068,519 


Total Budget Uses 


|5 


42,309,624 | 



* Tax Increment Bond Proceeds are construction funds only. For Bond Financing costs see 
separate Sources & Uses chart for Bonds 



11 



San Francisco | vj f t\ 

RedEvelopmenf Agency I ^ I • I 

770 Golden Gale Annul 

San rrancisto, CA S4102 



CBE3 



Attachment II 

WILLIE I. BROWN, JB„ Mayor 

Mfchalls W Satai, Prasldan! 

Kaovyn C, Paumounuln, We Prciseni 

Mark DufiiDp 

Lsrsy Klnj 

Ramw E. Remsre 

Darshin 3lngti 

Ssnnu vw 



41S.749.240D 
TTY 4l5.74£iSO0 Uffll! Roan, Ssacudve Olrettof 



November 21 ,2002 112-12202-023 

To: Bruce Robertson 

Harvey M Rose Accountancy Corp. 

1390 Market St # 1025, San Francisco, CA 94102 

From: Bill Carney 

Senior Project Manager, San Francisco Redevelopment Agency 

Subject: Transferable Development Rights 

This memorandum responds to the request from your office for a simple description of 
Transferable Development Rights ("TDR"s) as provided by the San Francisco Planning Code. 
TDRs provide an important source of funds for apordon of the Jessie Square Improvements, the 
proposed financing of which is now being analyzed by your office, 

TDRs are a mechanism set up by the San Francisco Planning cods for selling the development 
rights from a "preservation parcel" containing a historic building to a "development parcel" 
decreasing the amount of development that can occur on the first site and increasing that which 
can occur on the second site by the same amount. This compensates the owner of the historic 
building for preserving the historic building on a site, which could otherwise be demolished and 
developed for a larger building. Conversely, it allows the purchaser of the TDRs to bui] d a 
larger building on the development parcel than would otherwise be allowed. TDRs are sold by 
the square foot at rates determined by the market Sales are certified and recorded by the 
planning department, 

As an example, the proposed funding for the Jessie Square Improvements includes $4,529,624 
from the sale of TDRs by the Agency to Millennium Partners. These development rights derive 
from two historical buildings in the Yerba Buena Center Redevelopment Area: 168.281 square 
feet from the Jessie Street Substation site and 19,200 square feet from the Planters' 
Hotel site, Millennium Partners intends to use the TDRs to increase the amount of development 
allowed on a site on Mission Street between Fremont and Beale Streets. 

Please call me at 749-2412 with any additional questions. 



12 



Attachment III 



San Francisco Redevelopment Agency 

2003 Series A& B Tax Allocation Revenue Bonds 

(Jessie Square Garage acd Cultural & Open Space Improvements) 

Sources and Uses of Funds 



Par Value of Bonds [1] S43.100.O0O 

lists: 

Deposit to Construction Fund 34,900,000 

Deposit to Capitalised Interest 3,074.1 82 

Deposit to Reserve Account 4,3 10,000 

Deposit to Costs of Issuance [2] 126,709 

Bond insurance [3] 473.609 

Underwriters discount [4] 215,500 

Total uses of funds 543,100,000 



Naia 



II] Interest paid l'\ and 8/1 and principal 8/1, final maturity 2018. d<u=c aid ctlivsrec 2/2S/0S. 

[2] Includes legal scp;r.sK, financial advisory fees, priritins fees, tr.1r.22 :"::= aad other miscellaneous exper.s; 

[3] Sond insurance assuir.sd to b: .75°/. of total debt service, purchased in idv^c^. 

[4] Underwriter's discount assumed to be J% cf par or 35.00 per $1,000 bend. 



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15 



San Francisco 
Redevalopment Agancy 

770 Goldan Gate Aranue 
San Francisco, Ca 94102 



415.749.2400 
7TY41s.749.220O 




Attachment 

willie L drown, JR., Mayor 

Mictieje w, Si»un, PrasKart 

Kalh/yn C PalaniountaJn. Vlu^realtfen 

Mark :.- :: 

Loray Kinrj 

Ramon £. Ramsro 

Cirsdan Singh 

Bennrtwa 

Moth Rosen, Eieeuavs oiraner 



To: Harvey Rose. Budget Analyst 

Harvey Rose Accountancy Corp. 

From: William Carney. Senior Project Manager 

Date: November 22, 2002 

Subject: Replacement of Moscone Lease Payments 

As requested by your office, this memorandum provides further background on the 
Agency's proposed use of revenues from the proposed Jessie Square Garage to replace 
Moscone Convention Center Ground Lease revenue to continue to fund maintenance for 
the Verba Buena Gardens beginning in 2019. 

On March 1, 1988, the Redevelopment Agency signed a 30-year ground lease agreement 
with the City for the Moscone Convention Center. Under the terms of the 1988 ground 
lease agreement, the City currently pays the Redevelopment Agency an annual payment 
of $870,000. The lease agreement expires in March of 2018, and this source of revenue 
will therefore no longer be available to help pay for Yerba Buena Gardens maintenance 
and capital replacement needs, 

The Agency has therefore proposed to use 5870,000 in garage revenue for approximately 
three years, beginning in 2019 to replace the ground lease revenues. A recently 
completed capital maintenance study of Yerba Buena Gardens by 3DI International 
indicates an on-going critical need for these funds, especially as the facilities age, The 
Gardens, which include both the public open space and the cultural facilities, will have 
been in service for twenty- five years by 2019, Capital maintenance, repair and 
replacement are therefore expected to be a critical need at that point. 



16 



San Francisco 
Redevelopment Agency 

770 Golden Gate Avenue 
SanFranrisco, CA 94:02 



415.74S.JW0 
TTr4l5.74S.2500 



HE 

urn 



Attachment VI 
Page 1 of I 



WILDS L. ESOWN,JF,M5ysr 

MIchafle W.Ssxb-.Praslqsif 

ViWryp :, Poiemounaln, *o teldom 

Mart Duniep 

broy Kino 

Ramon £. Rotors 

Pannsn siigh 

asnny V, Yes 

Msrds Rcssn, «ataliv« Directs 



November 22, 2002 

To: Harvey Rose, Budget Analyst 

From: Chris Iglesias, Contract and Fiscal Services Manager 

RE: General Contractor Selection Process for the Jessie Squire Parking Garage and 
Related Structures 

In 1995 the Agency issued a Request for Proposals (RFP) for development of the Market 
Street parcel in the Yerba Buena Center Redevelopment Project Area. As a result of this 
process, the Agency Commission selected Millennium Partners to develop the Four 
Seasons Hotel and Condominiums, with related retail, parking and other improvements. 
The Disposition and Development Agreement (DDA) negotiated with Millennium 
included the potential for the development to include a parking garage under Jessie 
Square, with the construction of the Square and foundations for the adjacent cultural 
facilities. 

In August of 2000 Millennium Partners issued a Request For Qualifications (RFQ) for 
Construction Services for the Jessie Square Parking Garage, Plaza and structures for the 
Mexican and Magnes Museums. 

The RFQ followed the Agency's contracting guidelines as outlined in the DDA with 
Millennium Partners. These guidelines include extensive good faith effort steps (1 1) to 
ensure that rninority and woman-owned business enterprises have an equal opportunity to 
compete for and participate in contracts for the planning, design and construction of the 
buildings (and garage). 

As outlined in the good faith effort steps, Millennium Partners advertised the RFQ in the 
City's Bid and Contracts Newsletter, conducted site visits with prospective contractors 
and mailed the RFQ to organizations that serve the M/WBE contracting community. An 
added feature to the process included Millennium's commitment to try to include 
M/WBE participation at the prune contractor level. 



17 



Attachment V] 
Page 2 of 2 



This added feature is different from the requirements outlined in the DDA, which focuses 
on M/WBE participation at the subcontractor level. On September 20. 2002 the 
following eight contractors submitted qualifications: 

1 . Clark Construction 

2. Dennis J, Amoroso Construction 

3. G.M.I. Construction 

4. Ruiz Construction 

5. McCarthy Building Companies 

6. Plant Construction 

7. Ricblen Construction 

8. SJ, Amoroso Construction 

The following five contractors were invited to participate in the interview process: 

1. G.M.I. Construction 

2. Ruiz Construction 

3. McCarthy Building Companies 

4. Plant Construction 

5. Richlen Construction 

At the completion of the interview process the firms were ask to provide company 
financial statements and proposed budgets. Based on this information Millennium 
selected Plant Construction and Ruiz Construction as it main contractor for the Garage, 
Plaza and superstructures. This process also satisfied the Agency's goal of having an 
MBE contractor participate at the prime level, 

The prims team will bid out all of the sub-trades following the above referenced 
guidelines. 

The lead architectural firm is Gary Handell & Associates. The subconsultant portion 
includes 27 percent MBE participation and 13 percent WBE participation. Gary Handell 
was selected for the work because of their experience with the CB-1 Four Seasons, Yerba 
3uena Lane Connector and the Sony Metreon projects, their intimate knowledge of the 
area, and their proven ability to accomplish complex urban designs. 



San Francisco 
Redevelopment Agency 

770 Gcldap Sate Avenue 
S3fl FrBHClECQ. CA 94102 



115.749.2430 
TTY 415.74-9.2500 




Attachm ent VII 

WILLIE L BROWN. .R,. Mayor 

Mieneiia K Saxton. Prasldenl 
Kaifiryn C. Paiameunialn, Vlca Prsjldsrt 
Mark :.-::: 

Lsroy Kino 

flamin £, fiomaro 
Darsnan Stagfi 
Bonn/ v. Yes 

Mar^o Rwsn, Eieoudva Dlrssbi 



To: Bruce Robertson 

Harvey Rose Accountancy Corp. 

From: Mario Menchini 

Senior Financial Analyst 

Date; November 22, 20Q2 

Subject; Accounting & Reporting Requirements Associated vyith the Jessie Square 

Open Space and Parking Garage Financing 

Per your request, the Agency is submitting this memo to further clarify the accounting & 
reporting requirements associated with the Jessie Square Open Space and Parking Garage 
financing. As detailed in the Cooperation and Tax Increment Reimbursement 
Agreement, the Agency agrees to the following; 



I, 



2. 



Create a segregated account to hold all funds generated by the Parking Garage 

and keep a separate record of all financial transactions associated with said 

facility. 

Accompanying each reimbursement, the Agency will provide a report that lists 

the revenues, expenses, and net income of the Parking Garage and any unpaid 

obligation owed to the City. 

The Agency will consult with the City Controller's Office to determine the tax 

increment reimbursement amount. 

The Agency agrees to allow the City to examine all records and books related to 

the Parking Garage and associated financing and to have audits conducted by 

independent certified public accountants. 



19 



*££ 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Item 4 - File 02-1804 



Department: 



Item: 



Description: 



Department of Public Health (DPH) 

Ordinance retroactively increasing the licensing fee for 
garbage trucks and increasing the amount deposited into 
the Mandatory Refuse Collection Service Fund by 
amending Section 249.6 of the San Francisco Business 
and Tax Regulations Code and Section 10.100-7 of the 
San Francisco Administrative Code and ratifying past 
actions taken in connection with such licensing fee. 

The proposed ordinance would amend Section 249.6 of the 
Business and Tax Regulations Code by retroactively 
increasing the annual garbage truck licensing fee by 43.8 
percent, or by $995 from $2,273 to $3,268, for each garbage 
truck owned by the Golden Gate Disposal Company and the 
Sunset Scavenger Company, which operate such trucks, 
under permit with the DPH, to transport refuse and garbage 
in San Francisco. The proposed ordinance would also amend 
Section 10.100-7 of the Administrative Code by increasing 
the amount deposited into the DPH A dminis trative Services 
Mandatory Refuse Collection Service Fund (the Service 
Fund) by $995, or a 104.2 percent increase from $955 to 
$1,950 for each garbage truck. 

Without obtaining Board of Supervisors approval, the 
proposed annual garbage truck licensing fee was already 
increased from $2,273 to $3,268 as of FY 1997-98, and 
Golden Gate Disposal Company and the Sunset Scavenger 
Company have been charged the increased fees since FY 
1997-98. However, the A dmin istrative Code was never 
amended to reflect the increased fee of $3,268. Section 
10.117-70 of the Administrative Code presently requires 
that $955 of the prior $2,273 garbage truck licensing fee 
be deposited in the Administrative Services Mandatory 
Refuse Collection Service Fund, to pay for part of the 
DPH costs incurred in administering the Mandatory 
Refuse Collection Program, operated by the DPH 
Environmental Health Services Bureau. Mr. Jack Breslin 
of the DPH states that Section 10.117-70 requires that the 
remaining $1,318 (old fee of $2,273 less $955 deposit to 
the Service Fund) be transferred to the General Fund. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

20 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Under the proposed ordinance, the deposit to the Service 
Fund would be $1,950, with the balance of $1,318 
(increased fee of $3,268 less $1,950 deposit) remaining as 
the same amount to be transferred to the General Fund. 
As described in Attachment I, a memorandum provided 
by Mr. Breslin, the purpose of the DPH Mandatory Refuse 
Collection Program is to reduce the illegal dumping of 
garbage on vacant lots in the City by ensuring that all 
owners of occupied properties where refuse and garbage is 
collected from both residential and commercial buildings, 
have obtained a licensed garbage operator, which in San 
Francisco is either the Golden Gate Disposal Company or 
the Sunset Scavenger Company, for service consisting of 
garbage pick-up and the provision of garbage containers. 
As noted in Attachment I, under the Mandatory Refuse 
Collection Program, the DPH provides on-site 
investigations of complaints made by the Golden Gate 
Disposal Company or the Sunset Scavenger Company, to 
determine if occupied properties need a licensed garbage 
collection service provider. 

According to Mr. Breslin, the annual garbage truck 
licensing fee was previously proposed at a rate of $3,268 
in December of 1996, and as previously noted, was 
implemented in FY 1997-98 without obtaining Board of 
Supervisors approval. According to Mr. James Alexander 
of the DPH, the licensing fee was increased by $995, from 
$2,273 to $3,268 in order that the DPH Mandatory Refuse 
Collection Service Fund could recover a larger portion of 
the DPH costs to administer and enforce the Mandatory 
Refuse Collection Program. 

As stated in Attachment II, due to an administrative 
error, the increase in fee from $2,273 to $3,268 was never 
previously submitted to the Board of Supervisors for 
approval. This subject ordinance would now retroactively 
approve the $3,268 fee, which has been charged since FY 
1997-98. The memorandum further explains that the 
Department of Pubhc Health and the Tax Collector began 
billing garbage companies at the new rate of $3,268 
beginning in FY 1997-98. According to Mr. Breslin, the 
proposed fee of $3,268 was recently approved by the 
Health Commission on October 15, 2002 (Resolution #12- 
02). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Attachment III, provided by Mr. Alexander, details (a) 
program costs for FY 1997-98 through FY 2002-03, and b) 
the source of funds (Mandatory Refuse Collection 
Ordinance (MRCO) and General Fund) for the Mandatory 
Refuse Collection Program. Attachment IV, provided by 
Mr. Jim Gillen of the DPH, shows the total license fee 
revenues and Service Fund fund balance for FY 1997-98 
through FY 2001-02. As noted in Attachment IV, the 
Service Fund fund balance as of June 30, 2002 was 
$455,591. 

Comments: 1. The Budget Analyst notes that Section 10.100-7 of the 

Administrative Code designates the Mandatory Refuse 
Collection Service Fund as a Category Seven Special 
Fund. A Category Seven Special Fund is defined as a 
special fund where a) revenue proceeds are automatically 
appropriated "off budget" (i.e., such appropriations are not 
specifically identified in the annual DPH budget); b) 
interest earnings on fund balances are accumulated 
within the fund; and, c) carry forward balances are not 
permitted from year to year. Therefore, surplus balances 
at the end of each fiscal year for the Mandatory Refuse 
Collection Service Fund are, under the existing provisions 
of the Administrative Code, to be closed out and 
transferred to the General Fund. The Budget Analyst 
therefore recommends that the June 30, 2002 surplus 
Mandatory Refuse Collection Service Fund fund balance 
of $455,591 should be transferred to the General Fund. 

2. Attachment V is a memorandum provided by Mr. 
Alexander, providing additional information about the 
fee, the Mandatory Refuse Collection Service Fund 
surplus and expenditures from the Service Fund. Mr. 
Alexander states in Attachment V, that if the Fund 
balance from the Service Fund is closed out, annual 
garbage truck licensing fees will have to be increased in 
FY 2003-2004 to fund DPH's increasing costs to 
administer and enforce the Mandatory Refuse Collection 
Program. The Budget Analyst notes however that, as 
shown in Attachment IV, annual garbage truck licensing 
fee revenues of $288,600 in FY 2001-2002 exceed 
expenditures of $254,616 by $33,984. The Budget Analyst 
therefore does not concur that the annual garbage truck 
licensing fees would need to be increased in FY 2003-2004 
to fund increasing costs. 
BOARD OF SUPERVISORS 
BUDGET ANALYST 
22 



Memo to Finance Committee 

December 18. 2002 Finance Committee Meeting 



3. The Budget Analyst also recommends that Section 
10.100-7 of the Administrative Code be amended to designate 
the Mandatory Refuse Collection Service Fund as a 
Category Three Special Fund instead of a Category Seven 
Special Fund. Such an amendment would require DPH to 
specifically budget the annual Mandatory Refuse 
Collection Service Fund revenues for appropriation 
approval by the Board of Supervisors instead of allowing 
automatic appropriation of such revenues. Also, Section 
10.100-7 of the Administrative Code states that the Director 
of Administrative Services shall file a quarterly report 
regarding the Mandatory Refuse Collection Service Fund, 
including receipts and expenditures, with the Mayor, the 
Board of Supervisors, the Controller and the Budget Analyst. 
According to Mr. Alexander, such quarterly reports have 
never been filed, and the Budget Analyst has never received 
such reports. The Budget Analyst therefore recommends that 
this provision also be amended and that the DPH, instead of 
the Director of A dminis trative Services, provide annual 
reports regarding the special fund. 

4. According to Mr. Breslin, garbage truck licensing fees are 
paid annually by the Golden Gate Disposal Company and the 
Sunset Scavenger Company during the month of January. 
Mr. Breslin notes that the number of garbage trucks 
operated by the Golden Gate Disposal Company and the 
Sunset Scavenger Company increased from 133 garbage 
trucks in FY 1997-98 to 148 garbage trucks in FY 2002-2003. 
Mr. Breslin advises that because, at this time, the 
Department does not anticipate the Golden Gate Disposal 
Company or the Sunset Scavenger Company to increase the 
number of garbage trucks, annual revenues from licensing 
fees are expected to remain at approximately $483,664 
annually ($3,268 x 148 garbage trucks). 



BOARD OF SUPERVISORS 
BUDGE^ ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Recommendations: 1. As discussed in Comment Nos. 1 and 2, because the 

Mandatory Refuse Collection Service Fund is designated 
as a Category Seven Special Fund, the Budget Analyst 
recommends that the current surplus of $455,591 be 
transferred to the General Fund. 

2. As explained in Comment No. 3, the Budget Analyst 
recommends that a) page 2, line 10 of the proposed 
ordinance be amended to delete "category seven fund" and 
insert "category three fund"; and, b) that page 2, lines 18 
through 20 of the proposed ordinance be amended to 
delete the language that "The Director of Administrative 
Services shall file a quarterly report regarding the fund, 
including receipts and expenditures, with the Mayor, the 
Board of Supervisors, the Controller and the Budget 
Analyst" and insert the language that "The Department of 
Public Health shall file an annual report regarding the 
fund, including receipts and expenditures, with the 
Controller. " 

3. Approval of the proposed ordinance, as amended, is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

24 



Attach di e n t I 



Ms. Leanne Nairn November 14, 2002 

Budget Analysts Office 
1390 Market St. 10 th Floor 
San Francisco, CA. 94102 



Dear Ms. Nanh, 



This is in response to your e-mail request for information. Some of the issues raised in your listing of 
questions were addressed in the documents provided to you on November 13 . 

The Board of Supervisors adopted the Mandator}' Refuse Collection Ordinance in 1988, and charged the 
Department of Public Health with the duty to enforce its provisions. This ordinance charged the 
Environmental Health Section with the responsibility of investigating referrals made from the two licensed 
scavenger companies operating in San Francisco, listing properties that had not subscribed to mandatory 
garbage collection services as required in Article 6 of the Health Code. The ordinance provided revenues 
that would cover the cost of providing the resources needed to carry out its mandates. 

Basically what the service provides is an on site investigation of the referrals forwarded to the 
Department of Public Health. This field investigation determines if the property in question is in fact 
occupied. Once this is confirmed the Department then places the owner of the property on notice to 
subscribe to licensed garbage coiiection service within a specified time period. Failure to comply results in 
the Health Department ordering service for the property and providing a can if necessary. Tne costs of this 
service, to include administrative fees, are then charged to the property owner and collected by placing a 
lien on the property that then becomes attached to the property tax bill. Last year some 1,200 such referrals 
were investigated. The intent of the mandatory garbage collection ordinance is to insure that all occupied 
properties have in fact subscribed to licensed garbage service, and a container is present on the premises to 
deposit the trash, thereby reducing the likelihood that garbage will be illegally dumped on vacant lots 
around the City 

By 1996, the costs of the program had come to exceed the revenues generated from that portion of the 
annual license fee charged to scavenger companies for each of their refuse collection vehicles. Because of 
this, the fee increase was proposed. 

I hope that this information is responsive to your inquiry. Please contact me by e-mail or phone if I can 
provide additional information, (252-3989). 




Jack Breslin, Director 
Consumer Protection Programs 




City and County of San Francisco 
DEPARTMENT OF PUBLIC HEALTH 



Attachment 

Willie L. Brown, Jr., Mayor 
Mitchell H. Katz, M.D., 
Director of Health 



OCCUPATIONAL & ENVIRONMENTAL HEALTH 



MEMORANDUM 



December 9, 2002 

To: Leanne Nhan, Budget Analyst 

John E. Breslin, Director Consumer Protection Programs 
Re: Garbage Truck License Fee 



From: 



"The proposed ordinance would increase license fees charged for Permits to Operate 
refuse collection vehicles in San Francisco. This fee increase was previously prepared 
for review by the Health Commission and the Board of Supervisors during budget year 
1 995-96. A recent review of records regarding a related matter, revealed that the 
ordinance was in fact not acted on by the Health Commission or the Board of Supervisoi 
for reasons unknown at this time except that an administrative error was made during 
preparation of the proposal. This appears to have resulted in the matter not being 
presented to the Board of Supervisors. Records also reveal however, that the proposed 
ordinance documents were approved as to form by the City Attorney's Office acted on b 
the Tax Collector and further, that billing at the new rate commenced in FY 1997-98. 

On October 15, 2002, the Health Commission approved the proposed ordinance 
(Resolution #12-02). The reason why an error made 6 years ago is now being addressee 
and brought before the Board of Supervisors, is because the error was not discovered 
until two months ago when DPH conducted a review of the relevant Municipal Code 
Section in response to an inquiry relative to the Mandatory Refuse Collection program. 
The Proposed ordinance is intended to correct the administrative error." 



1390 Market Street, Suite 210 San Francisco, CA 94102 oc 



Attachment III 



GARBAGE TRUCK FEES 



PROGRAM COSTS / MRCO: 










| 




; 














POSITIONS 






FY 97/98 


FY 98/99 


FY 99/00 


FY 00/01 


FY 01/02 


FY 02/03 
















1052 








56,846 


58,647 


61,596 


62,823 


63,736 


72,532 


1426 










38,106 


39,594 


• 41,656 


42,856 


43,900 


46,875 


6108; 






45,310 


46,745 


48,964 


50,425 


51,678 


55,201 


6108 








45,310 


46,745 


48,964 


50,425 


51,678 


55,201 




















TOTAL SALARIES 






185,571 


191,731 


201,179 


206,529 


i 210,992 


229,810 








i 


MF3 




46,393 


47,933 


50,295 


51,632 


52,748 


57,453 
















PRORATED OPERATING COSTS 


64,906 


63,364 


68,512 


71,424 


81,708 


86,520 


I I I 








SUBTOTAL PROGRAM COSTS | 


296,870 


303,027 


320,086 


329,585 


345,449 


373,783 


fill 








I I I I I 


i 






PROGRAM COSTS / GENERAL FUND: 


I 






! I I I i I ! ! 






POSITIONS 


















6108 




45,310 


46,745 


48,964 


50,425 


51,678 


55,201 


6108,(0.5 FTE) 


22,655 


23,373 


24,482 


25,213 


25,839 


27,601 


6124j(0.25FTE) 


19,223 


19,608 


20,585 


20,991 


21,291 


23,308 




I 




SALARIES 87,188 


89,725 


94,032 


96,628 


98,808 


106,109 




I 




MF3 l 21,737 


22,431 


23,503 


24,157 


24,702 


25,527 


1 1 i 




PRORATED OPERATING COSTS 


28,396 


27,722 


30,018 


31,249 


35,748 


37,852 


| 












' | 


SUBTOTAL PROGRAM COSTS 


| 137,381 


139,878 


147,558 


152,035 


159.258 


170,438 


1 




TOTAL PROGRAM COSTS j 434,251 


442,906 


467,544 


431,620 


504,707 


544,271 



27 



Attachment IV 



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28 




■.'.' ' " Attachment V 

}ity and County of San Francisco Department of Public Health 



MEMORANDUM 

December 11, 2002 

TO: Harvey Rose, Budget Analyst 

FROM: James Alexander, Budget Manager 

RE: Mandatory Refuse Program 



A proposal for a fee increase was prepared in FY 1996/97 with the intent to include operating 
costs of the program and a pro rata share of Environmental Health administrative and indirect 
costs that are budgeted in the General Fund. Previous to the fee increase only direct personnel 
was being charged to the program. 

The fee increase started in FY 97/98 and generated revenues as shown in the table below. Also 
included in the table are the program's personnel expenditures that were charged to the fund 
prior to and since the collection of the increased fee. The fund developed a surplus in 97/98 and 
98/99 due to vacancies that occurred in the program. Additionally, the prorated general fund 
operating and administrative costs were not charged to the program since FY97/9S due to 
administrative oversight. 









ret; Increase 












| FY95/96 | 


FY 96/97 j 


FY97JS8 | 


FY9099 ! 


FY99/D0 | 


FY00JTJ1 | 


FY01/D2 | 


Revenues 
Expenditures 
Year End Surplus 


123,925 

[MBB3B) 

9.989 


127,970 ; 
013 7801 

14.190 


259,350 

(1 OG 1 39) 
159,211 


259,350 
fi"21 .4571 

137,893 


281,300 
(21 0.563)1 

50,337 


230,800 
030.810) 

49.930 


208,500 

(254.51?) 

33,384' 



If closed out at year end, the estimated surplus of S455.594 accumulated from FY 95/96 to 
FY01/02 would reduce the General Fund for Environmental Health in the current year. If the 
surplus is closed out, it is estimated that the fee would need to be increased in FY03-04 to cover 
increasing personnel costs and to allow a prorata share of operating and administrative costs to 
be covered by the program funds. Alternatively, if the surplus is carried forward to cover future 
costs, a fee increase could be deferred until FY05/06. 



15) 554-2600 101 Grove Street San Francisco, CA 94102 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Item 6 - File 02-1919 



Department: 
Item: 



Description: 



Treasure Island Development Authority 

Resolution approving and authorizing the Treasure Island 
Development Authority to enter into the 15 th modification 
of its Cooperative Agreement with the U.S. Navy in order 
to extend the Agreement retroactively from October 1, 
2002 to September 30, 2003. 

On May 2, 1997, the Board of Supervisors approved 
Resolution No. 380-97, authorizing the Mayor's Treasure 
Island Project Office to establish a nonprofit public 
benefit corporation known as the Treasure Island 
Development Authority to act as a single entity focused 
on the planning, redevelopment, reconstruction, 
rehabilitation, reuse and conversion of Treasure Island 
and Yerba Buena Island for the public interest, 
convenience, welfare and common benefit of the 
inhabitants of the City. On September 30, 1997, the 
Navy closed Treasure Island 1 as an active Naval Base. 
The California Legislature subsequently approved the 
Treasure Island Conversion Act of 1997, which designated 
the Treasure Island Development Authority as a trustee 
of the State Tidelands Trust and as the Redevelopment 
Agency for Treasure Island. 

On October 1, 1997, concurrent with the operational 
closure of the Naval Base, the City entered into a 
Cooperative Agreement with the Navy, with approval 
from the Board of Supervisors (File 244-97-4), in which 
the City agreed to assume responsibility for the following 
caretaker services on Treasure Island: (1) operation and 
maintenance for the water, waste water, storm water, 
electric and gas utility systems on the Naval Base, (2) 
public health, security and safety services, (3) grounds 
and street maintenance and repair, and (4) property 
management. Subsequently, the Cooperative Agreement 
was modified, with the approval of the Board of 
Supervisors (File 98-1751), to make the Treasure Island 
Development Authority, rather than the City, the party to 



1 All references to "Treasure Island" in the proposed Cooperative Agreement refer to the entire 
former Treasure Island Naval Station, which included the adjoining Yerba Buena Island. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

30 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



the Cooperative Agreement, and the Cooperative 
Agreement was extended for an additional one-year 
period, from October 1, 1998 to September 30, 1999 
(coinciding with the Federal fiscal year). In 1999, the 
Board of Supervisors again approved an extension of the 
Cooperative Agreement, for the period from October 1, 
1999 to September 30, 2000 (File 99-1970). In March of 
2001, the Board of Supervisors approved a retroactive 
extension of the Cooperative Agreement, for the period 
from October 1, 2000 to September 30, 2001 (File 01- 
0372). Lastly, in December of 2001, the Board of 
Supervisors retroactively approved a resolution extending 
the Cooperative Agreement for the period from October 1, 
2001 to September 30, 2002. According to Mr. Stephen 
Proud of the Treasure Island Development Authority, the 
proposed resolution represents the sixth time the 
Department has requested Board of Supervisors approval 
to extend the Cooperative Agreement. 

This proposed resolution would approve an extension to 
the existing Cooperative Agreement between the Navy 
and the Treasure Island Development Authority, for the 
one-year period from October 1, 2002 to September 30, 
2003. The proposed extended Cooperative Agreement also 
provides for no Navy reimbursement for the costs to the 
Treasure Island Development Authority of providing the 
above described caretaker services at Treasure Island. 

The proposed resolution represents the 15 th modification 
to the agreement with the U.S. Navy. Mr Proud advises 
that, in addition to the sixth modifications to extend the 
Cooperative Agreement, including this subject extension, 
there have been other technical modifications made to the 
Cooperative Agreement which did not require approval of 
the Board of Supervisors. According to Mr. Proud, all such 
technical modifications involved remittance of installment 
reimbursement payments by the U.S. Navy to the 
Treasure Island Development Authority during certain 
fiscal years. 

For each of the prior five years of the Cooperative 
Agreement, as well as the proposed sixth year, the Navy 
had agreed to reimburse the following amounts, totaling 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

31 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

$12,848,214, to the City to assist in funding the costs of 
providing the caretaker services at Treasure Island: 

Amount of 
Year of Cooperative Agreement Reimbursements 

(based on Federal Fiscal Year of by Navy to the 
October 1 through September 30) City 

FY 1997-1998 $6,058,214 

FY 1998-1999 4,000,000 

FY 1999-2000 2,500,000 

FY 2000-2001 145,000 

FY 2001-2002 145,000 

FY 2002-2003 



Total $12,848,214 

Mr. Proud advises that under the original 1997 
Cooperative Agreement, the Navy* did not provide the 
Treasure Island Development Authority with a written 
schedule of annual reimbursement amounts and has not 
submitted such a schedule to date. 

However, Mr. Proud states that the Treasure Island 
Development Authority was previously advised by the 
Navy that the Navy reimbursements would be reduced on 
an annual basis and eliminated in Federal Fiscal Year 
2002-2003, the year of the proposed extended subject 
agreement based on the U.S. Navy's determination that 
the Treasure Island Development Authority was earning 
sufficient revenues to pay for all costs of providing 
caretaker services at Treasure Island. Mr. Proud 
previously reported that through negotiations, the Navy 
agreed to make one last annual reimbursement to the 
City of $145,000 for Federal Fiscal Year 2000-2001. 
Subsequently, according to Mr. Proud, the Treasure 
Island Development Authority negotiated an additional 
reimbursement payment to be made by the Navy of 
$145,000 for Federal Fiscal Year 2001-2002. 

The Budget Analyst reported to the Board of Supervisors 
in December of 2001, that the Treasure Island 
Development Authority anticipated no further 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

32 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



reimbursement from the U.S. Navy after the $145,000 
amount noted above for FY 2001-2002 when the Board of 
Supervisors approved the fifth extension to the 
Cooperative Agreement in December of 2001 (File 01- 
2180). 

According to Mr. Proud, it is the Navy's policy to fund 
only those services which the Navy itself would perform 
on a closed Naval Station. Mr. Proud advises that the 
amount of the above annual reimbursements, provided to 
the Treasure Island Development Authority by the Navy, 
was established by the Navy and was based on the 
estimated costs for the Navy to provide the services and 
was not based on the estimated costs of the City. 
According to Mr. Proud, in executing the Cooperative 
Agreement with the Navy, and based on advice from the 
Navy, the Treasure Island Development Authority 
understood that the Navy would be decreasing its annual 
reimbursement: (a) as the City moved closer to acquiring 
full ownership of Treasure Island, which Mr. Proud had 
previously reported was expected to occur by the end of 
calendar year 2002, but now estimates will occur by the 
end of calendar year 2003; and, Ob) as the Treasure Island 
Development Authority leased additional areas of the 
former Naval Base from the Navy for revenue generating 
purposes. Mr. Proud advises that, in past years, the 
Treasure Island Development Authority has offset the 
annual reductions in monies reimbursed by the Navy 
with increased revenues derived from rentals on Treasure 
Island. 

The Attachment, provided by Mr. Proud, shows the types 
and amounts of revenue generated by the Treasure Island 
Development Authority providing the sources of revenue 
for FY 2002-2003 as well as for the five prior fiscal years. 

Treasure Island's FY 2002-2003 budget, as finally 
approved by the Board of Supervisors, totals $11,419,793. 
The source of funds supporting these expenditures include 
the operating revenues of $9,619,793 and 
Interdepartmental Recoveries of $1,800,000 consisting of 
the Fire Department's sublease payments of $1,800,000 
for a training facility at Treasure Island. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

33 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Comment: 



As previously noted, the Agreement would extend the 
existing Cooperative Agreement between the Navy and 
the Treasure Island Development Authority for the one- 
year period from October 1, 2002 to September 30, 2003. 
Mr. Proud advises that the Treasure Island Development 
Authority did not obtain approval from the Board of 
Supervisors to extend the Agreement prior to October 1, 
2002, the effective date of the proposed extension to the 
Cooperative Agreement with the U.S. Navy because 
initially the Navy did not intend to execute a Cooperative 
Agreement for Federal Fiscal Year 2002-2003 since there 
would be no further reimbursement payment to the 
Treasure Island Development Authority. However, Mr. 
Proud states that the Treasure Island Development 
Authority requested an extension of the Cooperative 
Agreement and the Navy required additional time to 
process the extension. Therefore, the proposed resolution 
should be amended to provide for retroactivity. 



Recommendations: 



1. Amend the proposed resolution for retroactivity to 
October 1, 2002, in accordance with the Comment above. 

2. Approve the proposed resolution, as amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

34 



Attachment 





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35 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Item 7 - File 02-1911 



Departments: 



Item: 



Description: 



Department of Human Resources (DHR) 
Fire Department 

Ordinance adopting and implementing the mediated 
agreement establishing the terms of the Memorandum of 
Understanding between the Service Employees 
International Union, Local 790 for H-l Fire Rescue 
Paramedics and the City and County of San Francisco, to 
be effective for the period July 1, 2001 through June 30, 
2003. (See Comment No. 4) 

The proposed ordinance would adopt and implement a 
Memorandum of Understanding (MOU) between the City 
and Service Employees International Union (SEIU), Local 
790. The proposed MOU, is for a two-year period from 
July 1, 2001 through June 30, 2003. The prior MOU 
expired on June 30, 2001. This MOU covers one 
classification, H-l Fire Rescue Paramedic employed by 
the Fire Department. According to Ms. Christine Ragan 
of the Fire Department, the H-l classification comprises a 
total of 17 budgeted positions, i^ccording to Ms. Alice 
Villagomez of the DHR, the terms of the prior two-year 
MOU for the period from July 1, 1999 to June 30, 2001 
have continued beyond the June 30, 2001 expiration date 
to the present, a period of approximately 18 months. Ms. 
Villagomez states that the City and Local 790 were 
unable to complete negotiations, pending the outcome of 
litigation filed by current and former H-l Fire Rescue 
Paramedics regarding their fire suppression status under 
the Fair Labor Standards Act (FLSA). Ms. Villagomez 
states that the Federal Court determined that the H-l 
Fire Rescue Paramedics did not qualify as fire 
suppression personnel under the FLSA. Thus, according 
to Ms. Villagomez, the City and Local 790 negotiated new 
provisions in the subject MOU, which reflect the Court's 
determination that H-l Fire Rescue Paramedics are not 
designated as fire suppression personnel. 

The major changes of the MOU are summarized below. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

36 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Wage Increases 



The proposed MOU would provide wage increases totaling 
9.3 percent over the two-year period of the MOU, to all H- 
1 Fire Rescue Paramedics based on the following 
schedule: 



Effective Date 


Percent Increase 


July 1, 2001 


2.3% 


January 5, 2002 


2.0% 


July 1, 2002 


2.5% 


January 4, 2003 


2.5% 


Total 


9.3% 


Wage Adjustments 





Percent Increase 


1.0% 


2.0% 


1.5% 


1.5% 



The proposed MOU would provide internal wage 
adjustments, totaling percent six over the two-year period 
of the MOU, to all H-l Fire Rescue Paramedics based on 
the following schedule: 

Effective Date 

July 1, 2001 

January 5, 2002 

July 1, 2002 

January 4, 2003 

Total 6.0% 

The prior MOU requires that the base wage rate 
differential between an H-l Fire Rescue Paramedic and 
an H-3 Firefighter Paramedic be maintained at or below 5 
percent. The proposed MOU specifies that this base wage 
rate differential would be 5 percent by January 4, 2003. 

Budget Buvback 

According to the proposed MOU, in recognition of the 
significant revenue shortfalls for the City for Fiscal Year 
2002-2003, H-l Fire Rescue Paramedics will return to the 
City 2.75 percent of then pensionable compensation 
earned during July 1, 2002 to January 3, 2003. In 
addition, the City will reduce the City's "pick-up" of the 
required employee contribution to the Employees 
Retirement System by 2.75 percent for the six-month 
period of January 4, 2003 to June 30, 2003 and the funds 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

37 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



would be returned to the City's General Fund. In return, 
H-l Fire Rescue Paramedics will receive a base wage 
increase of one percent that will go into effect at the close 
of business on June 30, 2003. 

Meal Breaks 

The proposed MOU codifies existing practice by specifying 
that H-l Fire Rescue Paramedics are expected to be 
available to respond to calls at all times during their 10- 
hour shifts, including meal breaks. The prior MOU is 
silent on compensation during meal breaks. 

Court D ut v Pav 



The proposed MOU codifies existing practice by providing 
for compensation to employees required to appear in court 
outside normal working hours to give testimony directly 
related to the performance of then job duties. The 
existing MOU is silent on compensation for court duty. 

2532 Paramedic 

Under the proposed MOU, any paramedic remaining in 
the 2532 Paramedic classification who wishes to be 
appointed to the H-l Fire Rescue Paramedic rank must 
submit his/her irrevocable and final request to do so 
within 30 days after the ratification of this Agreement by 
the Board of Supervisors. (See Comment No. 2) 

Floating Holidays 

Under the prior MOU, full-time H-l Fire Rescue 
Paramedics received 36 hours off for floating holidays. 
Under the proposed MOU, H-l Fire Rescue Paramedics 
will receive 24 hours off for floating holidays and such 
employees are compensated at straight time for floating 
holidays they do not take. Effective July 1, 2002, 
employees would no longer be compensated for floating 
holidays that they do not take. 

Volunteer Parent Release Time 

The proposed MOU contains new language granting H-l 
Fire Rescue Paramedics 4 hours of paid time off each 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

38 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



fiscal year to attend parent teacher conferences. In 
addition, H-l Fire Rescue Paramedics may receive up to 
40 hours per fiscal year of unpaid time to attend school 
activities for dependent children. The prior MOU is silent 
on release time for parents. According to Ms. Villagomez, 
this proposed language is consistent with other City 
MOUs. 

Bilingual Pay 

The proposed MOU would increase bilingual pay 
premiums from $36 to $50 per pay period, a $14 or 38.9 
percent increase. The bilingual premium would be paid to 
H-l Fire Rescue Paramedics who are in a "designated 
bilingual position" for at least ten hours per pay period. 
The Department would designate positions as bilingual 
based on an assessed need for bilingual skills in various 
areas of the City. This provision is consistent with the 
City's MOU with SEIU, Locals 250, 535 and 790. 

Wellness Program 

The proposed MOU contains new language establishing a 
Pilot Wellness Program as an incentive to decrease the 
use of sick leave. According to Ms. Villagomez this 
language is consistent with other City MOUs. Under the 
Pilot Wellness Program, H-l Fire Rescue Paramedics 
would be able to receive a cash payment upon retirement 
for unused sick leave, based upon the employee's salary 
rate and years of service. The program enables covered 
employees to receive 2.5 percent of accrued sick leave 
credits times the number of whole .years of continuous 
years of service times the employee's salary rate upon 
retirement. Therefore, for example, an employee with 20 
years of service would receive a payment upon retirement 
equal to 50 percent of their accrued sick leave (2.5 percent 
times 20 years). 

Health Benefits 

Under the current MOU, the City provides contributions 
for health benefits at the rate of $197 per month or at a 
rate required under the City Charter, whichever is 
greater. Under the proposed MOU, the City would 

BOARD OF SUPERVISORS 
BUDGET 3 ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



provide contributions for health benefits at the rate 
required under the City Charter. 



The following provisions reflect the determination that H- 
1 positions will not be designated as fire suppression 
personnel. Ms. Villagomez reports that personnel 
designated for fire suppression are those who have 
completed full training as Firefighters. 

Rescue Premium 

Under the proposed MOU, H-l Fire Rescue Paramedics 
would be paid a six percent Rescue Premium instead of an 
eight percent Paramedic/Fire Suppression Premium, 
which they are being paid under the prior MOU. H-l Fire 
Rescue Paramedics are no longer designated as fire 
suppression personnel in the proposed MOU. However 
they would now be considered "ancillary fire support 
personnel," which would provide H-l Fire Rescue 
Paramedics with a six percent Rescue Premium instead of 
eight percent. The lower rate for the Rescue Premium 
would partially offset the costs of the wage increases 
shown above. The Rescue Premium would be counted as 
part of final compensation for calculation of retirement 
benefits. 

Work Schedule 

The work schedule under the proposed MOU would 
change the length of a shift and the total hours of work 
per week. Under the prior MOU, one shift was 24 hours 
long and a workweek consisted of 48 hours. The proposed 
MOU would change the regular workday shift to eight 
hours and a regular workweek would consist of five 
consecutive worked days, or a total workweek of 40 hours. 
Ms. Villagomez reports that while the regular work 
schedule of H-l Fire Rescue Paramedics consists of five 8- 
hour days, the H-l Fire Rescue Paramedics currently 
work on an alternate schedule, as described below. 

The proposed MOU would allow individual H-l Fire 
Rescue Paramedics to request a flexible work schedule, 
with the approval of the appointing officer, and provided 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

40 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



that the employee works five days per week and 40 hours 
per week. 

Under the proposed MOU, and by mutual agreement 
between the City and SEIU, some or all represented 
employees could work under alternate work schedules. 
Such alternate work schedules may include a full-time 
workweek of less than five days, however they must be 
cost equivalent to regular work schedules. 

Ms. Villagomez advises that under the existing MOU the 
work schedule for H-l Fire Rescue Paramedics specifies a 
24-hour-long shift and an average of 48 hours per week. 
Ms. Villagomez further advises that in current practice an 
alternate schedule has been agreed upon by the Fire 
Department and SEIU with a 10-hour workday and 4-day 
workweek. 

Hazardous Materials Technician 

The proposed MOU deletes language, which was 
contained in the prior MOU, related to pay for Hazardous 
Materials Technicians since H-l positions have not 
qualified for eligibility for this type of pay. 

Compensatory Time 

Under the proposed MOU, the maximum amount of 
accumulated compensatory time for H-l Fire Rescue 
Paramedics would be reduced from 480 hours to 240 
hours. The maximum initial amount of accumulated 
compensatory time was reduced based on the 
determination that H-l Fire Rescue Paramedics are not 
designated as fire suppression positions. 

In-Lieu Time 

In-lieu time is compensation time accrued when a paid 
holiday falls on an employee's day off. The proposed 
MOU deletes language related to in-lieu time accrued by 
H-l Fire Rescue Paramedics working 24-hour shifts since, 
as previously mentioned, the employees covered by this 
MOU no longer work 24-hour shifts. Under the proposed 
MOU, employees would accrue 8 hours of in-lieu time, 
which could be taken as time off, since H-l Paramedics 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

41 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

are now on a 4-day, 10-hour-day work schedule. 
Employees would no longer be allowed to receive cash 
payment for "in-lieu time" that is not taken as time-off, 
which the provisions of the prior MOU authorized. 

Administrative Duty Assignment Pay 

Under the prior MOU, employees assigned by the Chief of 
the Department to an administrative duty assignment 
receive an additional $190 biweekly. Administrative duty 
assignments are administrative activities conducted by 
fire suppression personnel in addition to their regular 
duties. The proposed MOU would eliminate this 
language since administrative duty assignment is for fire 
suppression personnel, a designation which would no 
longer applicable to H-l Fire Rescue Paramedics under 
the proposed terms of the MOU. 

Call-Back 

The proposed MOU requires that when H-l Fire Rescue 
Paramedics are "called back," or called into their work 
locations when they are off-duty, they receive pay for a 
minimum of four hours or for the hours they actually 
work, whichever is greater. These call-back hours would 
be compensated at the applicable rate, which may include 
an overtime rate. Ms. Villagomez advises that this 
codifies existing practice. Ms. Villagomez further advises 
that the prior MOU is silent on the issue of call-back. 

Comments: 1. As shown in the Attachment provided by the 

Controller's Office, the terms of the proposed MOU will 
result in estimated net increased costs of $115,299 for 
Fiscal Year 2002-2003. According to Ms. Pamela Levin of 
the Controller's Office, the additional costs of the 
proposed MOU would be funded from the FY 2002-2003 
General Fund Salary and Fringe Reserve previously 
approved by the Board of Supervisors in the FY 2002- 
2003 budget 

2. The H-l Fire Rescue Paramedic rank in the Fire 
Department is a transitional classification, according to 
Ms. Villagomez, and no H-l Fire Rescue Paramedic 
positions would be filled from outside the Fire 
Department. Those H-l Fire Rescue Paramedics meeting 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

42 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

the necessary requirements and training may become H-3 
Firefighter Paramedics. In addition, existing 2532 
Paramedics may become H-l Fire Rescue Paramedics if 
they meet the necessary requirements. Ms. Ragan 
reports that there are currently 9 budgeted 2532 
Paramedic positions in the Fire Department. 

3. The above described proposed terms relate to the 
major financial changes to the prior MOU. It should be 
noted that, in addition to the above described major 
changes to the proposed MOU having fiscal impact, there 
are various other provisions in the proposed MOU, 
including: (a) elimination of language only applicable to 
fire suppression personnel, (b) permitting union-related 
notices to be transmitted via the Fire Department's 
teletype system, and (c) codifying guidelines and 
procedures for making corrections to payroll errors that 
may result in underpayment, overpayment or non- 
payment to employees. 

4. Although the proposed ordinance requests adoption 
and implementation of a mediated agreement 
establishing the terms of the MOU between SEIU, Local 
790 and the City, Ms. Villagomez reports that the terms 
of the proposed MOU were established through a 
negotiated agreement. Ms. Villagomez further reports 
that the proposed ordinance should request adoption and 
implementation of the MOU and not a mediated 
agreement. Therefore, the Budget Analyst recommends 
amending the proposed ordinance to request adoption and 
implementation of the MOU between SEIU, Local 790 
and the City. 

Recommendations: 1. In accordance with Comment No. 4, amend the 

proposed ordinance by deleting the words "the mediated 
agreement establishing" on line 3 of the proposed 
ordinance. 

2. Approval of the proposed ordinance, as amended, is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 




a CITY AND COUNTY OF SAN FRANCISCO OFFICE OF THE CONTROL 



Edward Harrinf 
Qjntro 



Moniquc Zm 
Deputy Contro 



December 3, 2002 Attachment 

Page 1 of 2 

Ms. Gloria L. Young, Clerk of che Board 

Board of Supervisors 

City Hall, Room 244 

1 Dr. Carlton B. Goodlett Place 

San Francisco. CA 94102 

RE: File Number 021911 

Amendment to Memorandum of Understanding (MOU) with Service Employees International Union, 
Local 790 for H-l Fire Rescue Paramedics 

Dear Ms. Young: 

In accordance with Ordinance 92-94, 1 am submitting a cost analysis of an amendment to the MOU between 
the City and County of San Francisco and the Fire Rescue Paramedics represented by SEIU Local 790. The 
amendment covers the period July 1, 2001 through June 30, 2003, and affects 17 budgeted positions with a 
salary base of approximately $1.22 million in the current fiscal year. 

In addition to the increases in wages, premiums and the establishment of the pilot wellness program, the 
amendment includes some provisions with minor fiscal impact. These provisions include call back pay, in 
lieu time, administrative duty assignment pay, jury duty pay, four (4) hours paid release time for parent 
teacher conferences, and 40 hours of unpaid release time for involvement in school related activities. We 
have also not estimated a possible reduction to overtime due to the implementation of the pilot wellness 
program. 

Based on our analysis, the amendment will result in costs of approximately $1 15,000 in FY 2002-2003, or 
approximately 9.4% above budget. This figure includes payments that will be made for retroactive 
implementation of provisions back to July 1, 2001. Please see Attachment A for specific cost estimates. 

If you have additional questions or concerns please contact me at 554-7500 or Pamela Levin of my staff at 
554-7554. 



Sincerely, 



Edward M. Harrington 
Controller 



Attachment 



Alice Villagomez. ERD 
Harvey Rose, Budget Analyst 



Citv Hall • 1 Dr. Carlton 6. CVjodlelt Place • Room 316 ■ Sun Francisco CA <M102-46<U FAX 4] I 

44 



Attachment 
Page 2 of 2 

Attachment A 

SEIU Local 790 H1 Fire Rescue Paramedics 
Estimated Costs FY 2002-2003 
Controller's Office 

Total Costs/fSavlngs) FY 2002-2003 

Wage Increase 

2.3% July 1,2001 29,161 

2.0% January 5, 2002 1 2^679 

2.5% July 1,2002 30,513 

2.5% January 4, 2003 1 5,305 

Wage Adjustments 

1% July 1,2001 12,679 

2.0% January 5, 2002 12,679 

1.5% July 1,2002 18368 

1.5% January 4, 2003 9,134 

Paramedic/Fire Suppression Premium 

Reduced from 8% to 6% per pay period (41 ,878) 

Additional Premiums and Benefits (1) 

Miscellaneous 1,265 

Pilot Wellness Program (2) 

2.5% of accrued sick leave if retiring after July 1 , 2002 7,717 

Wage-Related Fringe increases (3) 7,528 

Total Estimated Costs 1 1 5,299 



Amount Above Budgeted 2002-2003 Level 1 1 5,299 

Cost % of Salary Base 9.4% 

(1) Includes hepatitis C screening and an increase in the bilingual pay premium. 

(2) Assumes that a similar number of employees retire during the contract period as during FY 2001-2002. 

(3) Includes 2.75% employee retirement pick up for FY 2002-2003. 



45 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Item 8 - File 02-1942 
Department: 

Item: 

Amount: 
Source of Funds: 

Description: 



Fire Department 

Department of Public Works (DPW) 

Hearing to consider the release of reserved funds in the 
amount of $2,039,000 to fund the installation of six 
motorized gate valves in the City's Auxiliary Water 
Supply System (AWSS). 

$2,039,000 

1986 Proposition A Fire Protection Systems Improvement 
General Obligation Bond interest earnings, previously 
appropriated and placed on reserve by the Board of 
Supervisors. 

This request in the amount of $2,039,000 for the release 
of previously appropriated and reserved bond interest 
income monies would be expended for contractual services 
and DPW contract management costs for the installation 
of six motorized gate valves in the City's Auxiliary Water 
Supply System (AWSS). The AWSS is a system of 
reservoirs, cisterns, pipelines, pump stations, valves, and 
fireboats, comprising the source of water supply for fire 
protection in emergency situations. In September of 
2002, the Fire Department and the DPW requested the 
release of $2,071,417 for the installation of five motorized 
gate valves in the City's AWSS. On September 25, 2002, 
the Finance Committee released $32,417 of the requested 
$2,071,417 in order to allow the DPW to complete, the 
selection process for the construction contract for the 
installation of the motorized gate valves (File 02-1544) 
and instructed the Fire Department and DPW to request 
the remaining $2,039,000 once the competitive bidding 
process for the installation was completed. 

The DPW has completed a competitive bidding process for 
the installation of the motorized gate valves and selected 
JMB Construction, Inc as the contractor who submitted 
the lowest bid of $1,572,026 (see Comment No. 1). 
Previously, the DPW had estimated that the $2,071,417 
in funds would fund the installation of five motorized gate 
valves. However, as a result of the competitive bidding 
BOARD OF SUPERVISORS 

BUDGET ANALYST 

46 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



process, DPW has now determined that the subject 
$2,039,000 in reserved funds would fund the installation 
of six motorized gate valves, or one additional motorized 
gate valve, at the six locations listed below. Therefore, 
DPW has added a sixth location to the previously 
determined five locations for the installation of motorized 
gate valves in the AWSS. JMB Construction, Inc. bid a 
total of $1,572,026 for the installation of the six motorized 
gate valves. 

In November of 1986 the voters of San Francisco 
approved Proposition A, Fire Protection Systems 
Improvement General Obligation Bonds in the amount of 
$46.2 million to be used for the City's AWSS. The City 
sold a total of $46.2 million in Fire Protection Systems 
Improvement General Obligation Bonds ($31 million in 
1987 and $15.2 million in 1991) to finance improvements 
to the City's AWSS. According to Ms. Christine Ragan of 
the Fire Department, the amount of the bond proceeds 
have since been full}' appropriated by the Board of 
Supervisors and expended for AWSS capital 
improvements. 

In March of 1996, the Board of Supervisors approved a 
supplemental appropriation ordinance for $3,907,900 
(File 101-95-61) from accrued interest earnings from the 
Fire Protection Systems Improvement Bonds for four 
categories of capital improvement projects: (1) repair and 
improvement of the Fireboat Phoenix, (2) implementation 
of motorized AWSS control valves, (3) repairs to the 
AWSS water storage tank, and (4) emergency repairs of 
AWSS facilities. The Board of Supervisors placed 
$3,269,850 of the total appropriation of $3,907,900 on 
reserve (Ordinance No. 127-96) pending the submission of 
budget details. To date, a total of $1,167,942 of the 
$3,269,850 has been released, including $478,250 for the 
repair and improvement of the Fireboat Phoenix, 
$450,125 for emergency repairs to AWSS facilities, and 
$239,567 for repairs to the AWSS water storage tank (see 
Comment No. 1), resulting in a balance of $2,101,908 
remaining on reserve. As previously mentioned, on 
September 25, 2002, the Finance Committee released 
$32,417, resulting in a remaining balance of $2,069,491. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

47 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Approval of this subject request in the amount of 
$2,039,000 would leave a remaining balance of $30,491. 

This proposed expenditure of $2,039,000 for the 
installation of six motorized gate valves would be 
completed by an outside contractor at the following 
locations: (a) the southeast corner of Van Ness & Bay 
Street; (b) the southeast corner of Sacramento & Kearny 
Streets; (c) the southeast corner of 17 th & Dolores Streets; 
(d) the southeast corner of 7 th Avenue & Irving Street; (e) 
the southeast corner of Sutter & Kearny Streets; and (f) 
the southwest corner of Powell and Sacramento Streets. 
Currently the six locations have valves that must be 
manually opened and closed to control water pressure in 
the City's AWSS. Presently, the Fire Department must 
manually open or close a gate valve, by having Fire 
Department personnel access the gate valve, at each of 
the applicable site locations. The proposed installation of 
motorized gate valves would allow the Fire Department to 
remotely open and close the valves by sending a signal to 
a sensor attached to the motorized gate valves to allow for 
more or less water pressure in the City's AWSS as 
needed. 

Budget: A summary budget for the proposed installation of the six 

motorized gate valves is as follows: 

Location and Uses Amount 

Mobilization (see Comment No. 3) $70,000 

Van Ness Ave & Bay St. 218,220 

Sacramento & Kearny Sts. 174,500 

17 th St. & Dolores St. 217,100 

7 th Ave. & Irving St. 63,400 

Sutter & Kearny Sts. 273,550 

Powell & Sacramento Sts. 101,500 

Allowances (see Comment No. 3) 453.756 

Subtotal Bid Costs $1,572,026 

Contingencies (at 10 percent) 157.204 

Subtotal Estimated Construction Costs $1,729,230 
Construction Management & Inspection 

(DPW inhouse costs, see Attachment I) 224,800 
Construction Support 

(DPW inhouse costs, see Attachment I) 84.970 

Total Estimated Costs $2,039,000 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

48 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Comments: 



1. Mr. Saed Toloui of DPW, Project Manager for the 
installation of the motorized gate valves, reports that 
DPW selected the contractor for the installation of the six 
motorized gate valves in the City's AWSS, based on a 
competitive bidding process. Attachment II, provided by 
DPW, includes a list of the six companies, which 
responded to DPW including the amounts bid for the work 
to install the six motorized gate valves. 

2. The Board of Supervisors previously placed the subject 
requested funds on reserve pending a competitive bidding 
process for the installation of the motorized gate valves 
and other related work. The purpose of the Board of 
Supervisors reserve was for the Department to report 
back to the Board of Supervisors as to the results of the 
competitive bid process, including selection of the 
contractor and bid amounts. DPW has completed the 
competitive bidding process and selected the low bidder, 
JMB Construction, Inc., as the construction contractor. 



Recommendation: 



3. The amount of $70,000 budgeted for Mobilization 
includes the start-up costs for the contractor, JMB 
Construction, Inc. for the installation of the six motorized 
gate valves. The amount of $453,756 budgeted for 
Allowances includes costs for construction equipment and 
additional costs resulting from the construction work to 
be reimbursed to the Municipal Railway and Police 
Department by JMB Construction, Inc. 

Release the requested $2,039,000 in reserved funds. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

49 



Attachment I 



Motorized Valves #2 
JO 7090E (R) 



Construction Support 




Classification S/hr 


Estimated 
HRs 


Extension 




5254 iAssociate Mechanical Engineer 


S86 

$118 


157 
79 


$13,525 




5241 ; Mechanical Engineer 


$9,279 




5258 (Senior Mechanical Engineer $137 


26 


$3,591 


5174 i Administrative Engineer S127 


52 


$6,658 




5364 | Engineering Assoc. S74 


52 


$3,879 




1426 'Senior Clerk S58 


52 


$3,041 




5229 (Assoc. Traffic Engineer S86 


26 


$2,254 




5241 [Traffic Engineer $118 


52 


$6,186 




5211 'Senior Traffic Engineer $137 


13 


$1,796 




5504 


Project Manager II 


$127 


105 


$13,316 





Reproduction and misc. direct costs 







S2 1,445 






$84,970 




• I 






| 




Construction Management and Insp 


ection 

S/hr 






Classification 


Estimated 
HRs 


Extension 




5211 I Division Manager 


$137 
$128 


35 


S4.795 


-. 


5174 


Construction Manager 
Resident Engineer 


120 


$15,360 


5241 


$118 


500 
160 


$59,000 




1314 Public Affairs Staff $86 
5203 Office Manager $86 


$13,760 




400 


$34,400 




6318 Inspector S94 


800 


$75,200 




Material Testing Lab/ Environemntal 
I versite 




$22,285 




$224,800 



50 



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Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Item 9 - File 02-1966 

Department: 

Item: 



Amount: 
Source of Funds: 

Description: 



Fire Department 

Hearing to consider release of reserved funds, Fire 
Department's FY 2002-2003 budget, in the amount of 
$322,277 for salaries of five existing training officers 
(three H-39 Training Captains and two H-43 EMS 
Training Section Chiefs). 

$322,277 

Reserved funds in the Fire Department's FY 2002-2003 
budget, as finally approved by the Board of Supervisors. 

During its consideration of the Fire Department's budget 
for FY 2002-2003, the Board of Supervisors reserved six 
months of salary costs, in the amount of $322,277, for the 
following five filled positions: 



Position 



Salary 



1 (0.5 FTE) H-39 In-Service Training Officer 

1 (0.5 FTE) H-39 H-3 Academy Officer 

1 (0.5 FTE) H-39 Firefighter Recruit Training Officer 

1 (0.5 FTE) H-43 EMS In-Service Training Section Chief 

1 (0.5 FTE) H-43 EMS Academy Section Chief 

5 (2.5 FTE) 

Variable Mandatory Fringe Benefits (11 percent) 



$57,338 
57,338 
57,338 
57,338 
57,338 

35,587 



TOTAL: 



$322,277 



The funds were reserved for the purpose of having the 
Fire Department report back to the Finance Committee 
by December 1, 2002 on its progress towards reorganizing 
its training functions to create an integrated Division of 
Fire and Medical Training, in accordance with 
Recommendations 1.4.1 to 1.4.3 of the Budget Analyst's 



Board of Supervisors 
Budget Analyst 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

January, 2002 Management Audit of the Fire Department 
(see Comment No. 2). These recommendations were 
approved by the Board of Supervisors Rules and Audits 
Committee during its extensive hearings on the Budget 
Analyst's Management Audit Report prior to the Budget 
Committee's consideration of the Mayor's Recommended 
FY 2002-2003 Fire Department budget. The Rules and 
Audits Committee recommended implementation of 
Management Audit Recommendations 1.4.1 to 1.4.3 to the 
Budget Committee. While stating that there would be no 
savings in FY 2002-2003, the Rules and Audits 
Committee noted that there would be future year savings. 
These future year savings are estimated to be $159,374 
annually in 2003 dollars. 1 

Comments: 1. As part of its comprehensive management audit of the 

Fire Department, the Budget Analyst's Office reviewed 
the Fire Department's training and education functions. 
The Budget Analyst's Office concluded in Section 1.4 of 
the Management Audit Report that: 

• Fire Department training and education functions are 
currently spread across the Division of Training, the 
EMS Academy Section of the EMS Division, and the 
EMS In-service Training Section of the EMS Division. 

• Structural and management fragmentation hinders 
integration of the Fire Department's fire suppression 
and emergency medical services responsibilities, 
complicates management accountability, creates the 
potential for unevenly applied training and education 
quality standards, and increases costs. 

2. As a result of these findings, the Budget Analyst's 
Management Audit contained the following 
recommendations: 

• Recommendation 1.4.1: Transfer the EMS Academy 
Section and the EMS In-service Training Section to a 



1 The projected annual savings of $159,374 assume (a) January 4, 2003 pay rates, and (b) a total 
16.8 percent mandatory fringe benefits rate. 

Board of Supervisors 
Budget Analyst 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



renamed Division of Fire and Medical Training during 
FY 2002-2003. 2 

• Recommendation 1.4.2: Recruit widely for the new 
Director of Fire and Medical Training position, 
including advertising for a candidate with both fire 
suppression and emergency medical services training 
experience. 

• Recommendation 1.4.3: Restructure the Division of 
Fire and Medical Training during FY 2002-2003 to 
integrate training and education functions for fire 
suppression and emergency medical services, and to 
reduce the number of staff reporting directly to the 
new Director of Fire and Medical Training position by 
FY 2003-2004. 

3. The Budget Analyst's Management Audit Report 
stated that a reduction in the number of personnel 
reporting directly to the new Director of Fire and Medical 
Training should result in the elimination of five positions 
and the creation of four positions, as follows: 

• Elimination of two Classification H-39 Fire Captain 
positions responsible for the H-3 Academy and 
firefighter recruit training, and elimination of one 
Classification H-43 EMS Academy Section Chief 
position. These three positions to be eliminated would 
be replaced by two positions: (a) one Manager, Cross- 
Training (who could be either Classification H-39 or 
Classification H-43), and (b) one Manager, Recruit and 
EMT Training (who could be either Classification H-39 
or Classification H-43). 

• Elimination of one Classification H-39 Fire Captain 
position responsible for in-service training, and 
elimination of one Classification H-43 EMS In-service 
Training Section Chief position. These two positions 
to be ehminated would be replaced by one position: 
the Manager, In-service Training (who could be either 
Classification H-39 or Classification H-43). 3 



2 The dates contained in the Management Audit Report's recommendations have been updated in 
this report to the Finance Committee in order to accommodate the length of the review period 
between publication of the Management Audit Report, the public hearings held by the Rules and 
Audits Committee, and the budget review conducted by the Budget Committee. 

3 To meet Emergency Medical Services Agency (EMSA) requirements, the successful apphcants for 
the three new Division of Fire and Medical Training management positions (the Manager, Cross 
Training; the Manager, Recruit and EMT Training; and the Manager, In-service Training) wouid 
need to hold a current paramedic, nursing, or medical license. If there are no appropriately qualified 

Board of Supervisors 
Budget Analyst 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



• The teaching and education services currently 
provided by the EMS Academy Section Chief and the 
EMS In-service Training Section Chief should be 
provided by one new Classification H-33 Rescue 
Captain position. 

As noted above, the estimated net personnel cost savings 
from eliminating five existing positions and creating four 
new positions would be $159,374 annually. 

Attachment I is an extract from the Budget Analyst's 
Management Audit Report which compares the current 
organization of the Fire Department's training functions, 
under two divisions, with the recommended organization 
of the Fire Department's training functions under an 
integrated Division of Fire and Medical Training. 

4. By reducing the number of management positions 
which currently have overlapping areas of responsibility, 
and creating new management positions which integrate 
equivalent emergency medical and fire suppression 
training and education functions, the Budget Analyst's 
Management Audit determined that the more 
streamlined Division of Fire and Medical Training would: 

• Adopt a more integrated and strategic approach to 
training and education. 

• Develop clearer management accountabilities. 

• Apply consistent training quality standards. 

• Result in net estimated savings of $159,374 annually 
in personnel costs. 

5. In Attachment II, a November 27, 2002 memorandum 
to the Finance Committee requesting release of the 
subject reserves, the Fire Chief advises that the Fire 
Department has undertaken the following activities to 
consolidate emergency medical and fire suppression 
training: 



cross-trained staff within the Fire Department to successfully fill these three new positions, the 
Management Audit recommended that the Fire Department advertise for appropriately qualified 
outside applicants. 

Board of Supervisors 
Budget Analyst 

55 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



• The Fire Department conducted its first combined 
emergency medical and fire suppression training 
module in September and November of 2002. 

• The Director of Training is developing a master 
training schedule for 2003 which comprises a number 
of training modules combining emergency medical and 
fire suppression training. 

• The Fire Department instituted a classroom 
reservation and scheduling procedure to coordinate the 
sharing of classroom space and equipment by both 
emergency medical and fire suppression training 
programs. 

• The Director of Training instituted mandatory 
quarterly meetings for emergency medical and fire 
suppression training staff to promote training 
consolidation. 

• The Fire Department established a centralized 
training database. 

• The Director of Training is working with the Real 
Estate Division and the Mayor's Office of Economic 
Development to locate viable sites for a consolidated 
training facility to facilitate cross-training of 
emergency medical and fire suppression staff. 

6. The Fire Department's November 27, 2002 
memorandum to the Finance Committee (Attachment II) 
does not state what progress the Fire Department is 
making towards the structural reorganization 
recommended in the Budget Analyst's Management Audit 
Recommendations 1.4.1 to 1.4.3. Attachment III is a 
December 11, 2002 memorandum, provided by Deputy 
Chief Joseph Asaro of the Fire Department, which 
explains why the Fire Department is not implementing 
the Budget Analyst's recommendations in order to achieve 
an integrated Division of Fire and Medical Training by FY 
2003-2004. According to Deputy Chief Asaro, the Fire 
Department: 

• Supports integration and consolidation of all training 
and education functions under the current name of the 
Division of Training once a common training facility is 



Board of Supervisors 

Budget Analyst 
56 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



available instead of the current three training 
locations. 

• States that "a pool of candidates with both fire and 
medical training does not exist from the rank of H-30 
Captain which is used to fill the H-39 Training 
Captain positions or in the H-33 Paramedic Captain 
which is used to fill the H-43 Section Chief positions." 
The Fire Department contends that the integrated 
Division of Training should support promotional 
opportunities for Fire Department staff who have the 
necessary experience in "site specific fire and 
emergency medical policies, procedures, and standards 
applicable to the San Francisco Fire Department." 

• Objects to a reduction in the number of officers 
responsible for in-service training. 

7. In terms of the issues raised by the Fire Department 
in Attachment III, the Budget Analyst notes that: 

• The Fire Department is not implementing the Budget 
Analyst's Management Audit Recommendations 1.4.1 
to 1.4.3 previously approved by the Rules and Audits 
Committee. 

• Contrary to the Fire Department's statement in 
Attachment III, the organizational restructuring of the 
Fire Department's training and education functions is 
not dependent on relocation of all training functions to 
a single training facility. The Budget Analyst notes 
that the Fire Department was able to conduct its first 
combined emergency medical and fire suppression 
training module in September and November of 2002 
despite not having a single training facility. An 
integrated training and education program can be 
provided from more than one facility. 

• Despite having been responsible for providing 
emergency medical services since July 1, 1997, the 
Fire Department lacks a pool of appropriately cross- 
trained Classification H-39 Fire Captains and 
Classification H-43 EMS Section Chiefs, in terms of 
both (a) the present incumbents of those 
classifications, and (b) the staff who can act in those 
classifications or could promote to those classifications 
once the necessary Civil Service Commission 
certification rule has been adopted. Since July 1. 
1997, the Fire Department has had five years in which 

Board of Supervisors 
Budget Analyst 
57' 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



to ensure that its current and future training and 
education providers are appropriately cross-trained, 
but the Fire Department has failed to do so. According 
to Ms. Christine Ragan of the Fire Department, the 
approved emergency medical services merger plan 
never required the Fire Department to cross train 
Classification H-33 Rescue Captains. The Budget 
Analyst considers that cross-training of current and 
future Fire Department training and education 
providers, regardless of their classification, would 
provide role models to encourage more Fire 
Department staff to cross-train. 

While applicants for the Fire Department's training 
and education management positions from within the 
ranks of the Fire Department would have San 
Francisco Fire Department-specific and San Francisco 
site-specific knowledge, these attributes are not 
sufficient arguments against advertising outside of the 
San Francisco Fire Department for qualified cross- 
trained applicants and hiring them if they are more 
highly qualified. The Budget Analyst notes that: 

(a) Both the Fire Chief and the Chief Financial Officer 
were appointed from outside the Fire Department. 

(b) All non-management positions in the new Division 
of Fire and Medical Training would continue to be 
filled by their current incumbents. Most of these 
current staff have promoted up through the ranks 
of the San Francisco Fire Department. 

(c) All training and education managers should be 
qualified to meet the Federal and State training 
requirements for emergency medical and fire 
suppression services which govern the San 
Francisco Fire Department's policies and 
procedures. 

According to Mr. Martin Gran of the City Attorney's 
Office and Ms. Alice Villagomez of the Department of 
Human Resources, pursuant to the meet and confer 
provisions contained in State law, the City Charter, 
the Administrative Code's Employee Relations 
Ordinance, and the City's Memorandum of 
Understanding with Local 798, the Fire Department 
has the right to: 



Board of Supervisors 
Budget Analyst 

58 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



(a) Restructure the Fire Department's training and 
education functions, although a new organizational 
structure is subject to a meet and confer process on 
the restructuring's impacts. 

(b) Hire appropriately qualified applicants from 
outside the Fire Department, subject to a meet and 
confer process which considers reduced promotional 
opportunities for existing staff, workload impacts, 
and changed access to overtime. 

• The proposed reduction of one training and education 
manager is an efficiency made possible by reducing 
overlapping areas of responsibility. One of the Budget 
Analyst's recommendations is to create one new 
Classification H-33 Rescue Captain position to provide 
the teaching and education services currently provided 
by the EMS Academy Section Chief and the EMS In- 
service Training Section Chief. 

8. Although Ms. Ragan states that displaced Fire 
Department employees would result in lay-offs where the 
ranks are filled, the Budget Analyst concludes 
unqualifiedly that no current Fire Department employees 
would need to be laid off as a result of restructuring the 
Fire Department's training and education functions. In 
FY 2002-2003 the Fn-e Department has 1,926.24 FTE 
positions, of which the five positions presently on reserve 
represent approximately 0.26 percent. Therefore, any 
current training and education managers who are not 
appropriately qualified for the new training and education 
manager positions would, as uniformed staff, be eligible 
for reassignment to the Fire Department's daily minimum 
staffing requirements for emergency medical or fire 
suppression services. 

9. As stated in the Budget Analyst's Management Audit 
Report Transmittal Letter (pages 5 and 6): 

As the Department moves forward, the lack of 
meaningful integration of its two principal functions 
[emergency medical and fire suppression services] will 
continue to hamper its organizational effectiveness. 
For example, ... many more resources are devoted to 
the Department's fire suppression-focused Division of 
Training than to its training sections within the EMS 

Board of Supervisors 
Budget Analyst 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Division, even though 70 percent of the Department's 
workload is emergency medical services related. 4 This 
reflects both a strategic and a training failure, and is 
likely to reinforce some of the cultural friction between 
fire suppression and EMS staff that surfaced during 
our study. 

Recommendation: Disapprove release of the subject reserved funds until the 

Fire Department provides the Finance Committee with a 
plan for the structural reorganization of its training and 
education functions in FY 2003-2004, as recommended by 
the Budget Analyst's Management Audit Report 
Recommendations 1.4.1 to 1.4.3, and as recommended by 
the Rules and Audits Committee of the Board of 
Supervisors. 



4 For example, the current Division of Training has 26 staff under the Director of Training, while 
the two EMS sections responsible for emergency medical services training and education have only 
nine staff under the EMS Chief, plus part-time paramedic and EMT instructors as needed. Ms. 
Ragan states that over 50 percent of the Fire Department's training hours are related to emergency 
medical services. Therefore, over half of the training and education hours are being provided by 
fewer than half of the available training and education staff. 

Board of Supervisors 
Budget Analyst 

60 



Attachmant I 
Page 1 of 2 




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62 



CITY AND COUNTY OF SAN FRANCISCO Attachment I 1 

SAN FRANCISCO FIRE DEPARTMENT Pa 9 e 1 of 2 

Mario H. Trevino, Chief of Department ^^ ^ SEC ° ND STREET 

Bernie F. Lee, Acting Deputy Chief of Operations f^^\ SAN FRANCISC0 ' CA 94107-2015 

Joseph C.Asaro, Deputy Chief of Administration \^§3fv~/ Telephone: (415)558-3400 

November 27, 2002 



Supervisor Aaron Peskin, Chair Finance Committee 

City Hall Room 

1 Carlton B. Goodlett Place 

San Francisco, CA 94107 



Re: Release of Reserves for Training Officers 



Dear Supervisor Peskin: 

The San Francisco Fire Department respectfully requests the release of salaries for five 
training officers. The salaries for three H-39 Training Captains and two H-43 EMS 
training Section Chiefs for the second half of fiscal year 02-03 were placed on reserve with 
the recommendation that a report be submitted to the Finance Committee detailing the 
progress on our efforts and plans to consolidate fire and medical training. 

These positions provide the medical and fire training needed to fulfill the mission of the 
Fire Department in saving lives and property. Training is one of the most important 
aspects of any modern Fire Department. As such, the Department has implemented the 
following procedures as standard practice in the management of all training functions: 

1. Coordination and scheduling of all training programs, including emergency medical 
training, are developed and approved by the Director of Training. In conjunction with 
all training personnel, the Director of Training is developing the master training 
schedule for 2003. 

As part of this effort, the first combined emergency medical and fire suppression 
training (Module 10) was conducted in September at the Treasure Island Training 
Facility. This training involved the management of a multi-casualty incident at a Ine 
fire scenario. The use of the Incident Command System (ICS) at a multidisciplinary 
event was reviewed and practiced. This highly successful training module was held as 
a cooperative effort by fire and medical training personnel, and several joint training 
modules will be scheduled as part of the annual training cycle. Additionally, a large 
scale disaster drill was conducted at Candlestick Park on Saturday, November 2' u , as a 
follow-up to the joint training. This major drill involved 1000 community volunteers. 
This joint emergency medical and fire-suppression training operation was the first of its 
kind in San Francisco. 



63 



Attachment II 
Page 2 of Z 



2. A classroom reservation and scheduling procedure has been instituted which permits 
fire and medical training programs to share classroom space and equipment. As an 
example, during October and November of this year, the training requirements of the 
Department have greatly exceeded the available training space at all three training sites. 
The collaboration and coordination between the fire and medical training staff 
permitted the Department to overcome a serious classroom scheduling impasse. 

3. The Director of Training has instituted mandatory quarterly staff meetings in an effort 
to have all training personnel work collaboratively towards consolidation. These 
meetings will forge relationships initially and promote a shared base of knowledge and 
experience amongst medical and fire suppression instructors. Eventually, the training 
staff will receive joint staff development in such matters as the creation of cross- 
disciplinary training programs based on modem adult learning methods including 
behavioral objectives, interactive training, and use of medical and firefighting materials. 

4. The Department has established procedures regarding the maintenance of all training 
records including suppression, medical, and technical rescue. Training personnel at all 
three sites have received instruction in the use and management of the centralized 
training database. 



The implementation of a new training facility comprises the third phase of the 
Department's plan. The Director of Training has made a concerted effort to work with the 
Department of Real Estate and the Mayor's Office of Economic Development to locate 
viable sites for a consolidated training facility. The physical separation of the Department's 
training facilities and the continued need to crosstrain all members of the training staff 
represent challenges in coordinating emergency medical and fire suppression training. 
Furthennore, the proposed development of Treasure Island does not include the existing 
live burn facility, which further emphasizes the need to identify a consolidated fire and 
emergency medical training facility. 

The Department remains committed to providing high quality training for its members and 
the best possible service to the community we serve. The release of training staff salaries 
will permit us to continue in this endeavor. Your assistance in this matter is gratefully 
appreciated. 



Sincerely, 




^Wi^ 1 



Jvlano H. Treviho 
Chief of Department 



CC: Ben Rosenfield. Mayor's Office of Finance and Legislative Affairs 
Gloria Young. Clerk of the Board 
San Francisco Fire Commission 
Har\e\ Rose. Budget Analvst 



64 



12/12/02 07:46 FAX 

Attachment III 



Page 1 of 4 

CITY AND COUNTY OF SAN FRANCISCO 
SAN FRANCISCO FIRE DEPARTMENT 

Mario H. Trevino, Chief or Department ^TX ^ ^^ ^^^^ 

Bernie F. Lee, Acting Deputy Chief of Operations fj^B*\ SAN FRANCISCO, CA «)4in7-20IS 




Joseph C. Asaro, Deputy Chief of Administration \^2ftNV Telephone: (415) 55S-3400 



December 11,2002 



Supervisor Aaron Peskin, Chair Finance Committee 

City Hall Room 

1 Carlton B. Goodlett Place 

San Francisco, CA 94107 



Re: Release of Reserves for Training Officers 



Dear Supervisor Peskin: 

The Department supports integration and consolidation of all training and 
education functions whenever possible. As such, the Department has outlined a three 
phase plan for integration of all training and relocation at a common site in previous audit 
responses which maintains the current name of the Division of Training and supports 
promotional opportunities for members of the Department. 

Training is one of the most critical functions of fire and emergency medical 
services, and the Department requires all of its existing training resources to meet its goal 
of improving and expanding training programs over the next several years. 

A clear indication of the progress obtained by the Department is the deployment 
of 18 advance life support (ALS) engine companies. In February 2003, the number of 
ALS engines will expand to 25, further blending fire and emergency medical operations 
and improving service to the citizens of the City and County of San Francisco. 

The audit suggests the number of training officers responsible for in-service 
training be reduced which would severely impact the effective development and 
implementation of fire and medical training activities. Both fire and medical services 
officers often participate in various committees both within and outside of the 
Department that require specific expertise. These officers attend professional framing 
programs, conduct performance reviews, meet with students, review class evaluation 
forms, and schedule instructors. Combining training functions does not reduce the 
amount of this activity. 



65 



12/12/02 07:46 FAX 

Attachment III 



Page 2 of 4 



With the anticipated retirements of approximately 14% of our uniformed 
employees over the next three years, the need for a fully staffed Training Division is of 
paramount importance. The salaries for three H-39 Training Captains and two H-43 
Training Section Chiefs for the second half of fiscal year 2002-2003 were placed on 
reserve with the recommendation that a report be submitted to the Finance Committee 
detailing the progress on our efforts and plans to consolidate fire and medical training. 

The letter dated November 27, 2002 to the Finance Committee outlined the 
progress the Department has made in combining fire and medical training. It remains the 
Department's goal to combine medical and fire training at one location. Currently 
training is provided at three separate locations: 

• 19 & Folsom - Fire suppression training for new hires, Haz Mat 
recertification, and a 7 story fire training tower for probationary members and 
In-service training 

• Presidio - Emergency medical training, certification and recertification 

• Treasure Island - Live bum training, specialized training (i.e. search and 
rescue, engine and truck drills, roof ventilation drills), wild land training, and 
required maritime training 

Last fiscal year, the Fire Department conducted 106,021 hours of training at these 
three sites. That averages to 21,204 hours of training managed by the existing 5 training 
positions whose salaries are on reserve. These numbers do not include the hours to 
supervise and participate in the development, implementation and evaluation of training 
programs, continuing education, policies, curriculum and activities, and coordinating and 
implementing changes to training modules as required by local, state or federal law as 
well as change in safety standards. They are required to ensure that all training is 
properly tracked and a data base of training is maintained to ensure compliance to 
mandates and standards. 

The H-39 Tra inin g Captains require expertise, experience and knowledge of fire 
suppression. These positions coordinate and supervise all Department training activities, 
prepare training curriculum and documentation, maintain and review all training records, 
identify and assess current and future training needs, and assist with research and design 
and development of specialized workshops, seminars and orientation programs. The H- 
43 Training Section Chiefs require experience in medicine and the management of an 
adult educational program. These positions require extensive field experience as a 
paramedic and the paramedic academy curriculum is entirely medical in nature. 



66 



Attachment 1 1 1 



Page 3 of 4 



In summary, the duties and responsibilities of the H-39 Captains and the H-43 
Training Section Chiefs include but are not limited to the following: 

• H-39 Recruit Training Officer 

Responsible for oversight of H-2 Firefighter Recruit Academy, monthly 
evaluations of Probationary Field Training; coordination support and 
evaluation of San Francisco Fire Department Reserves 

• H-39 In-Service Training Officer 

Responsible for oversight of In-Service Training of all uniformed 
members of the San Francisco Fire Department; provides on-goin^ 
training and evaluation of front line firefighters, officers, companies and 
units. 

• H-39 H-3 Academy Officer/Treasure Island Training Facility Coordinator 

Responsible for oversight of H-3 Firefighter/Paramedic Academy and 
monthly evaluations of Probationary Field Training; Coordinator of all 
activities at the Treasure Island Training Facility including tracking and 
scheduling all activities, oversight of fee schedule and assistance with 
oversight of maintenance contract. 

• H-43 Section Chief- In-Service Training Section 

Coordinates and implements all manner of medical training for the 1,880 
members of the Department. Directs a continuous cycle of training 
designed to provide all required medical tr ainin g of paramedics, EMT's 
and First Responders mandated by local, state, and federal regulations. 
Manages an aggressive program that provides and tracks over 25,000 
hours of training annually. This individual protects the legal authority of 
the Department to provide emergency medical care to the community by 
maintaining the licensure and certification of all its employees. 

• H-43 Section Chief - EMS Academy 

Responsible for all new emergency medical training mcluding the H-2 
probationary EMT class, the Paramedic Training Program, training for 
paramedic preceptors, preparation for the National Registry Paramedic 
examination, EMT-ambulance training, and houses all material as a 
training center for American Heart Association (AHA). The AHA 
certifications in CPR and ACLS are mandated for all members in the 
Department. 



A recommendation was made in the audit report to require that all training 
officers possess a current paramedic, nursing or medical license. However, a pool of 
candidates with both Ore and medical training does not exist from the rank of H-30 
Captain which is used to fill the H-39 Training Captain positions or in the H-33 
Paramedic Captain which is used to fill the H-43 Section Chief positions. Hence, the 



67 



12/12/UZ 07:4b 1-AA 

Attachment 1 1 1 



Page 4 of 4 



only way to implement the audit recommendation would be to recruit from outside the 
Department. This would not only trigger meet and confer with Fire Fighters Local 798 
but would also be detrimental as members from the outside would not be experienced and 
knowledgeable in site specific fire and emergency medical policies, procedures, and 
standards applicable to the San Francisco Fire Department. 

Emergency medical and fire suppression instructors bring a great deal of 
knowledge and experience in their respective disciplines but lack cross over experience at 
this time. Recent efforts by the Division of Training to coordinate the existing, highly- 
experienced training staff has accomplished, in large part, the goal and spirit of 
integrating SFFD training functions. 

In the future, as outlined in the Department's three phase plan, greater cross over 
training for employees will create an internal pool of resources and provide opportunities 
for employees to progress and promote in the Department to these positions. 

The need for continued high quality training with adequate and appropriate 
staffing is evident. Training cannot be compromised because it so directly impacts the 
ability to deliver quality service, a safe working environment and the fulfillment of our 
Mission Statement. 



Sincerely, 




Josepn Asaro 

Deputy Chief of Administration 



Mario H. Trevino, Chief of Department 

Ben Rosenfield, Mayor's Office of Finance and Legislative Affairs 

Gloria Young, Clerk of the Board 

San Francisco Fire Commission 

Harvey Rose, Budget Analyst 



68 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Item 10 - Files 02-1876 



Department: 
Item: 

Location: 



Purpose of Lease 
Extension: 



Lessor: 
Lessee: 



Department of Administrative Services, Real Estate Division 

Resolution authorizing the exercise of an extension option 
at 875 Stevenson Street for various City departments. 

875 Stevenson Street: a portion of the first floor, all of the 
second, third, fourth and fifth floors, 25 parking spaces, and 
basement storage space. 



Office space in the amount of 158,442 square feet, as detailed 
in Attachment I to this report, provided by the Real Estate 
Division, for the following City Departments and functions: 
Assessor - Payroll; Controller - Payroll and Personnel; Public 
Administration and Public Guardian -County Veterans 
Service; Department of Public Works (DPW) - Payroll, 
Accounting, Streets and Mapping; MUNI - Security, MIS and 
Payroll; Reproduction and Mail Services; and, PUC Utilities 
Engineering Bureau, 25 parking spaces and 3,000 square 
feet of basement storage for the Law Library. 

Western Mart Co., L.P. (Western Mart) 

City and County of San Francisco through the Real Estate 
Division 



Term of Lease 
Extension: 



Five years, commencing on December 1, 2002 and 
terminating on November 30, 2007 (see Comment No. 3). 



Additional 

Right of Renewal: On November 30, 2007, the City would have an option to 

extend the lease for (a) one six month period, and (b) two one 

year periods. 

Monthly and Annual 

Rent Payable by 

the City to 

Western Mart: The monthly rent payable by the City to Western Mart for 

158,442 square feet of office space, 25 parking spaces and 
3,000 square feet of basement storage space at 875 
Stevenson Street, would be $290,477 or $3,485,724 annually 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

69 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



($22.00 per square foot or approximately $1.83 per square 
foot per month based on the 158,442 square feet of office 
space). This proposed rent of $3,485,724 annually would 
remain the same during the entire five year lease extension. 
The existing rent is $218,587 monthly or $2,623,044 
annually ($16.55 per square foot). Therefore, the proposed 
lease extension represents an increase of $862,680 annually 
($71,890 monthly) or 32.9 percent over the existing rent. 



Utilities and 

Janitorial 

Services: 



The City would continue to pay for the costs of electricity, 
janitorial services, and security guards. According to Mr. 
Larry Jacobson of the Real Estate Department, the City 
would pay approximately $1,050,000 annually for electricity, 
DPW custodians, and Building and Grounds Patrol Officers. 
Attachment II to this report, provided by Mr. Jacobson, 
shows the annual budget for these services. 



Comments: 



1. According to Mr. Jacobson, all of the existing City 
department tenants would remain at 875 Stevenson Street, 
with the exception of the PUC Utilities Engineering Bureau 
which will relocate its offices from the third floor (32,000 
square feet) at 875 Stevenson Street to 1155 Market Street 
before March 1, 2003. The Budget Analyst previously 
reported to the Finance Committee for a supplemental 
appropriation ordinance (File 02-1892) approved by the 
Board of Supervisors on November 25, 2002, that the 
Department of Aging and Adult Services (DAAS) will move 
into the third floor at 875 Stevenson Street by August of 
2003.1 



2. According to Ms. Monique Zmuda of the Controller's 
Office, City department tenants do not have the funds 
budgeted for the increased monthly rental costs during FY 
2002-2003 from December 1, 2002 through June 30, 2003 of 
$71,890 per month for seven months, or a total of $503,230, 
in their approved FY 2002-2003 budgets. According to Mr. 
Ben Rosenfield of the Mayor's Budget Office, the Mayor's 



1 The PUC will pay for the relocation and improvement expenses of the DAAS, which will cost 
$298,000 from funds appropriated in the supplemental appropriation (File 02-1892), and for four of 
the five months (March of 2002 through January of 2003) at the existing rent rate ($759,942 
annually, $63,328.50 monthly), which will cost the PUC $253,314 from funds approved in their FY 
2002-2003 budget. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

70 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Office will not support a supplemental appropriation for such 
increased rental costs and will work with the applicable City 
departments to absorb such increased costs in their FY 2002- 
2003 budgets. 

3. Mr. Jacobson advises that the Real Estate Department is 
bringing the subject resolution to the Board of Supervisors, 
after the existing lease expired on November 30, 2002, 
because the City and Western Mart only reached an 
agreement on November 21, 2002. Mr. Jacobson states that 
the City is not renting the space at 875 Stevenson Street on 
a month to month basis but is rather waiting for retroactive 
approval to reimburse Western Mart for December's rent 
payment under the terms of the proposed five year lease 
extension. The proposed resolution should therefore be 
amended to provide for retroactivity. 

4. As explained in Attachment II to this report, Mr. 
Jacobson states that an independent appraiser, David 
Bohegian, determined the prevailing market rental rate at 
875 Stevenson Street to be approximately $1.83 per square 
foot per month ($22.00 per square foot per year), or 
$3,485,724 annually for the 158,448 square feet of office 
space which the City is leasing. Mr. Jacobson states that 
the Real Estate Department agrees that Mr. Bohegian's 
independent appraisal of the market rental rate of the 
property represents fair market value. 

Recommendations: 1) In accordance with Comment No. 3, amend the subject 
resolution to provide for retroactivity. 

2) Approve the subject resolution, as amended. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

71 



875 STEVENSON RENT ALLOCATION 



Attachment I 



SOMA 


Rent Per 


Monthly Annual 


Department Area 


Sa.R. 


Rent Rent 










Reproduction (1st) 


9,396 


1.8333 


17,226 


206,708 


DTIS (1st. 5th) 


35,158 


1.8333 


64,455 


773,462 


Assessor/Recorder (1st) 


9,934 


1.8333 


18,212 


218,544 
22,660" 


Lobby 









Public Administrator (2nd) 1,030 


1.8333 


1.888 


Muni (formerly Pub. Admin. Space) 1 2,248 


1.8333 


22,454 


269,451 


Muni (2nd) 8,873 


1.8333 
1.8333 


16,267 


195,202 


Controller - PPSD (2nd & 3rd) 13,230 


24,255 | 291,055 


PUC (3rd) 33,146 


1.8333 


60,767 


729,199 


DPW (4th) 


33,700 


1.8333 


61,782 


741,387 


Cafe (4th) 








Storage (1st) 


1,727 


1.8333 


3,166 


37,993 


(Storage: Treasurer 50%, Human Ser. 30% 






Retirement 10%, Controller 5% 








Purchaser 5%) 












| 


Totals 158,442 




$290,472 1 53,485,661 



stevebud 
7? 



Attachment 1 1 
Page 1 of k 




ATTACHMENT #1 RE: File 02-1876 

MEMORANDUM 
DATE: December 4, 2002 



TO: Harvey Rose, Budget Analyst 



FROM: Larry Jacobson 

Senior Real Property Officer,. 



The following items are in response to your office's questions: 



1. The reason that this resolution is being submitted to the Board of Supervisors 
after December 1, 2002 is that negotiations began in June 2002, and were not 
completed until November 21, 2002; too late to meet the December 1, 2002 
deadline. 



2. Paragraph 9 of the First Amendment of the lease describes the process for 

establishing an extension option rental rate; this process was used by the Mart 
(Landlord) and the City (Tenant). First it states "At the commencement of each 
Extended Term, the Rent shall be adjusted to equal ninety-five percent (95%) of 

the Prevailing Market Rate ". The Amendment also includes a process for 

each party to hire an appraiser. If the appraisers' value is more than 10% apart, a 
third appraiser will be hired. The third appraiser will then average his value with 
the closer of the two previous appraisals. "This third appraisal will then be 
averaged with the closer of the two previous appraisals and the result shall be the 
Prevailing Market Rate". 

The 875 Stevenson Street Landlord's appraiser (Rhoades) recommended a $26.50 
per square foot rental rate, while the City's appraiser (Carneghi) set fonh a rate of 
$12.38 per square foot. The third appraiser (Bohegian) was hired by the City and 
the Landlord, and established a rate of $22.00 per square foot. 

If the City and the Landlord strictly followed the mechanism outlined in the lease, 
the Prevailing Market Rate would have been midpoint between the Rhodes 
appraisal ($26.50) and the Bohegian appraisal ($22.00) specifically $24.25 per 
square foot. The City and the Landlord, however, agreed to accept the Bohegian 
rental rate of $22.00, which is less than 95% of the $24.25 ($23.03) . It was 
advantageous to the City to accept $22.00 rather than 95% of $24.25. 

LJ/875 Stevenson/harveyrosc 875Stevns2 

73 



Attachment 1 1 
Page 2 of 2 



According to the terms of the lease, the City is obligated to lease the entire 
158,442 square foot premises. The third floor of the subject building is presently 
occupied by the Public Utilities Commission staff. The staff will be moved to 
1155 Market Street in the spring of 2003. The furniture, telephones and servers 
will remain in the leased space to be used by the next tenant: Department of 
Aging and Adult Services will move in as soon as is practical. Any large office 
move normally takes 60 to 90 days to have one tenant move out and a new tenant 
move in. The Real Estate Division anticipates that the time available will 
facilitate a smooth transition from PUC to DAAS. 



4. The cost of security, janitorial / maintenance and electricity during the current 

fiscal year is as follows: 

Security $264,000 

DPW/Maint. 701,000 

Electricity 85,000 

$1,050,000 



Larry Jacobson 12/4/02 



LJ/875 Stevenson/harveyrose 875Stevns2 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Item 11 -File 02-1877 
Departments: 

Item: 



Description: 



Department of Administrative Services 
Convention Facilities Management (CFM) 

Resolution authorizing the Director of Convention 
Facilities Management to execute an amendment to the 
operating agreement between Convention Facilities 
Management and the Moscone Joint Venture by 
increasing the amount payable by Convention Facilities 
Management to the Moscone Joint Venture by $829,109. 
or 5.5 percent, from $15,015,100 to $15,844,209. 

The proposed resolution would authorize the Director of 
Convention Facilities Management (CFM) to increase the 
amount of the operating agreement between the 
Department of Administrative Services' Convention 
Facilities Management with the joint venture contractor 
known as Moscone Joint Venture, consisting of SMG and 
Thigpen Limited, Inc., by a total of $829,109 from 
$15,015,100 to $15,844,209, a 5.5 percent increase. The 
proposed amendment to the operating agreement would 
pay for the cost of SMG and Thigpen Limited, Inc. to 
prepare the new Moscone Center West for occupancy from 
March 1, 2003 through June 30, 2003. The source of 
funds for the operating agreement is Convention 
Facilities revenues. No General Fund monies are utilized 
for the operating agreement costs. 

Mr. Jack Moerschbaecher, the Director of CFM, reports 
that the Department currently projects that, as of March 
1, 2003, Moscone Center West will be ready to be 
prepared for occupancy four months prior to the planned 
official opening in July of 2003. Therefore, the 
Department is requesting to increase the amount of the 
operating agreement with SMG and Thigpen Limited, 
Inc. Mr. Moerschbaecher advises that such increased costs 
for operating Moscone Center West were not included ir 
the FY 2002-2003 operating agreement because 
Convention Facilities Management did not know when 
Moscone Center West would be substantially complete 
and ready to prepare for occupancy prior to the opening in 
July of 2003. Mr. Moerschbaecher reports that the costs 
payable to SMG and Thigpen Limited, Inc. are needed as 
of March 1, 2003 in order to provide for housekeeping, 
promotion, event management, security and other 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

maintenance and operating costs prior to the opening of 
Moscone Center West in July of 2003. 

Budget: A summary budget for the funds to be expended from 

March 1, 2003 through June 30, 2003 are as follows: 





Amount 


Salaries and Wages 


$381,189 


Payroll Taxes and Benefits 


129,620 


Maintenance 


36,300 


Supplies 


56,500 


Overhead 


134,600 


Promotion 


22,900 


Other Operating Expenses 


24,000 


Utilities 


44.000 


Total 


$829,109 



Attachments I and II, provided by the Office of 
Convention Facilities Management, provide additional 
budget details to support the expenditure of $829,109. 

Mr. Jeff Pera of the Controller's Office reports that 
Convention Facilities Management will transfer $829,109 
in Convention Facilities revenues previously allocated to 
CFM's capital budget for the Moscone Expansion Project 
to the operating budget for the Moscone Center. Mr. Pera 
advises that CFM can transfer the amount without 
approval or notification of the Board of Supervisors in 
accordance with Administrative Code Section 3.18. Mr. 
Moerschbaecher states that the $829,109 is available for 
transfer to pay for the increased costs of the operating 
agreement for FY 2002-2003 because construction costs 
for Moscone Center West were approximately $900,000 
less than the amount budgeted for FY 2002-2003. 

Comments: 1- Mr. Moerschbaecher states that the Office of 

Convention Facilities Management will increase the 
amount of the operating agreement with the Moscone 
Joint Venture by an estimated $5,000,000 in FY 2003- 
2004 for the inclusion of the Moscone Center West 
operating costs for FY 2003-2004, resulting in a total 
estimated FY 2003-2004 operating agreement of 
$20,015,100, or approximately 33.3 percent more than the 
current agreement amount of $15,015,100. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

76 






Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



2. Currently, the Moscone Center has approximately 
600,000 square feet of meeting and exhibit space. The 
new Moscone Center West will provide for an additional 
300,000 square feet of meeting and exhibit space, an 
increase of 50 percent, for total meeting and exhibit space 
of 900,000 square feet. 

3. As shown in Attachment II, the amount of $381,189 
for March 1, 2003 through June 30, 2003 budgeted for 
Salaries and Wages includes expenditures for hourly 
wages for Operations, Housekeeping, Engineering, and 
Security and Traffic Control with hourly rates from 
$10.55 per hour to $31.32. 

4. The amount of $22,900 budgeted from March 1, 2003 
through June 30, 2003 for Promotion includes 
expenditures for printing, advertising, photography and 
client relations. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

77 



Attachment I 



Convention Facilities Management 
Moscone West Projected Budget 
March I, 2002 - June 30, 2002 



Operating Expenses 

Salaries & Wages 

Payroll Taxes & Benefits 

Maintenance 

Supplies 

Overhead 

Promotion 

Other Operating Expenses 

Utilities 



March April May June Total 



65,894 


75,894 


98,944 


140,457 


381,189 


21,156 


21,156 


22,562 


64,746 


129,620 


9,075 


9,075 


9,075 


9,075 


36,300 


14,125 


14,125 


14,125 


14,125 


56,500 


33,200 


33.200 


33,255 


34,945 


134,600 


5.725 


5,725 


5,725 


5,725 


22,900 


1,250 


1,250 


1,880 


19,620 


24,000 


9.000 


9,000 


11,000 


15,000 


44.000 



Total Operating Expenses 159.425 169.425 196.566 303.693 829.109 



78 



Attachment II 



SAN FRANCISCO CONVENTION FACILITIES 
SCHEDULE OF PAYROLL EXPENSE - MOSCONE WEST 
BUDGET - FOUR MONTH PERIOD ENDING JUNE 30, 2003 



TITLE 



EMPLOYEE NAME 



HOURLY 
RATE 



FTE 
HOURS 



PRC POSED 

Y/E£/3O/2003 



OPERATIONS 

OPERATIONS MANAGER 
EVENT ATTENDANTS - REGULAR 



OPEN 


S 25.96 


2,054 


53,330 


FULL-TIME EQUIVALENTS 


S 18.22 


1,439 


26,210 


VACATION 






3,010 



OPERATIONS TOTALS 



-,493 



62,542 



HOUSEKEEPING 

WINDOW WASHER 
OUTSIDE PERSON 
EVENT ATTENDANT 



REGULAR 



ENGINEERING 

MAINTENANCE ENGINEER 



OPEN 


S 18.52 


976 


18,080 


OPEN 


S 13.52 


976 


18,080 


FULL-TIME EQUIVALENTS 


S 18.22 


1,439 


26,210 


VACATION 






5,082 



[HOUSEKEEPING TOTALS" 



OPEN 

VACATION 

[ENGINEERING TOTALS 



I 


3.391 | 


67.452 | 


31.32 


2,416 


75,670 
5.842 


1 


2,416 | 


81.512 j 



SECURITY & TRAFFIC CONTROL 

SECURITY SUPERVISOR 
SECURITY OFFICER 
TRAFFIC CONTROLLERS 



FULL-TIME EQUIVALENTS 


S 19.49 


1,746 


34,030 


FULL-TIME EQUIVALENTS 


S 17.53 


5,656 


102,680 


PULL-TIME EQUIVALENTS 


S 10.55 


324 


3,420 


VACATION 






9,553 



[SECURITY TOTALS 



7,926 



149,683 



GRAND TOTALS 



17,225 



361.189 



79 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Item 12 - File 02-1975 



Department: 
Item: 



Source of Funds: 



Airport 

Resolution authorizing the Airport Commission to accept 
and expend five grants totaling $1,089,000 from the Bay 
Area Air Quality Management District (BAAQMD) for the 
Airport Clean Air Vehicle Project, which acquires clean air 
vehicles for private Airport transportation operators that 
transport persons to and from the Airport. 

Transportation Fund for Clean Air (TFCA), Vehicle 
Incentive Program (VIP) administered by the Bay Area Air 
Quality Management District (BAAQMD). TFCA is funded 
by Bay Area vehicle registration fees. 



Amounts and 
Grant Periods: 








Grant Title 

Light Duty 1 Low Mileage 
Compressed Natural Gas 
(CNG) Vehicles 


Grant Period 

January 2002 - 
January 2004 


#of 

Vehicles 

14 


Amount 
$51,000 


Light Duty CNG Vehicles 
Supplemental 


July 2002 - 
July 2004 


2 


9,000 


Heavy Duty 1 CNG Vehicles 


November 2002 - 
November 2004 


31 


440,000 



Heavy Duty Liquefied November 2002 - 14 

Petroleum Gas (LPG) Vehicles November 2004 



490,000 



Light Duty Low Mileage CNG 
Vehicles 



November 2002 - 22 

November 2004 

Total 83 



99,000 



$1,089,000 



Description: 



The Airport Clean Air Vehicle Project is a program to 
encourage businesses that transport persons to and from 
the Airport to replace a portion of their gasoline- and diesel- 



1 "Light Duty Vehicles" are vehicles that weigh less than 10,000 pounds with cargo. 
Vehicles" are vehicles that weigh 10,000 pounds or more with cargo. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

80 



"Heavy Duty 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Budget: 



Indirect Costs: 
Comments: 



powered vehicles with clean air vehicles, such as 
Compressed Natural Gas (CNG) vehicles and Liquefied 
Petroleum Gas (LPG) vehicles. According to Mr. Roger 
Hooson of the Airport, the proposed five grants are similar 
to nine other grants previously approved by the Board of 
Supervisors for the acquisition of clean air vehicles to 
replace gasoline- and diesel-powered vehicles for private 
businesses that provide transportation to and from the 
Airport. 

As listed in Attachment I to this report, provided by Mr. 
Hooson, the proposed five grants would provide a subsidy to 
private companies for the purchase of 83 clean air vehicles 
to replace existing gasoline- and diesel-powered vehicles. 
The funds granted by the BAAQMD and administered by 
the Airport, would cover the difference in the cost between 
purchasing the new gasoline- or diesel-powered vehicles 
and the CNG and LPG vehicles. 

Attachment I to this report, provided by Mr. Hooson, shows 
the estimated grant fund allocation for the acquisition of 83 
clean air vehicles. As stated above, the subsidies are based 
on the approximate incremental increased costs to the 
private companies of the clean air vehicles (CNG and LPG 
fueled) compared to acquiring conventional vehicles 
(gasoline or diesel fueled). 

As shown in Attachment I, these five grants would provide 
approximately 22.6 percent, or $1,089,000, of the total 
estimated cost of $4,818,000 for the 83 CNG vehicles to be 
purchased by the participating private businesses listed in 
Attachment I. The balance of $3,729,000 would be paid by 
the 16 participating companies. 

Indirect costs would be waived by the Airport in order to 
apply all grant funds to direct program costs. 

1. The Grant Application forms, shown in Attachment II, 
include Disability Access Checklists. Mr. Hooson states 
that the Grant Application forms inaccurately identify the 
grant periods for the following grants: 01-Light Duty Low 
Mileage, 01-Light Duty Supplemental, and the 02-Light 
Duty Low Mileage. Mr. Hooson advises that he will 
resubmit grant application forms for these grants that 
accuracy describe the grant periods. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

81 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



2. Mr. Hooson advises that all costs under this grant are 
capital costs, and 100 percent of the funds would be used in 
each case toward the purchase of the CNG and LPG fueled 
vehicles. Mr. Hooson further advises that the acceptance of 
the proposed grant funds would not increase the operating 
costs of the City and no City funds would be used for the 
acquisition of the 83 vehicles. 

3. The 16 participating private companies, Yellow Cab of 
San Mateo, Airline Coach Service, California Mini-Bus, 
Park N Fly, Parking Company of America, SFO Shuttle 
Bus Company, Doubletree Hotel, SkyPark, Red Roof Inn, 
Serendipity Land Yachts, Hotel Airport Shuttle, Lome's 
Travel and Tours, Bay Shuttle, East Bay Connection, 
Hilton Garden Inn, and JNJ Shuttle Service have provided 
the Airport with letters of intent to participate in the 
project, and with purchase orders for the specific CNG and 
LPG vehicles. 

4. Mr. Hooson states that the Airport would administer the 
grants, disburse the grant funds to participating hotels and 
transportation companies, and monitor the project. 
According to Mr. Hooson, these duties will be absorbed by 
an existing Transit Planner IV position. 



Recommendations: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

82 



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84 



File Number: Attachment H 

(Provided by Clerk of Board of Supervisors) Page 1 01 10 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: BAAQMD Grant 01 -Light Duty Low Mileage 

2. Department: Airport Commission 

3. Contact Person: Roger Hooson Telephone: (650) 821-6511 

4. Grant Approval Status (check one): 

[x] Approved by funding agency [ ] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $ 51,000 

6a. Matching Funds Required: $ None 
b. Source(s) of matching funds (if applicable): 

7a. Grant Source Agency: Bay Area Air Quality Management District 
b. Grant Pass-Through Agency (if applicable): 

8. Proposed Grant Project Summary: 

One San Francisco International Airport taxicab operator, and one SFIA crew shuttle operator will acquire a 
total of 8 taxicabs and 6 vans, all dedicated natural gas. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: 1/02 End-Date: 12/02 

10. Number of new positions created and funded: None 

11. If new positions are created, explain the disposition of employees once the grant ends? N/A 
1 2a. Amount budgeted for contractual services: None 

b. Will contractual services be put out to bid? N/A 

c. If so, will contract services help to further the goals of the department's MBE/WBE 

requirements? N/A 

d. Is this likely to be a one-time or ongoing request for contracting out? N/A 



85 



1 3a. Does the budget include indirect costs? [ ] Yes [x] No Attachment II 

Page 2 of 10 
b1 If yes, how much? $ 
b2 How was the amount calculated? 

c. If no, why are indirect costs not included? 

[ j Not allowed by granting agency [x] To maximize use of grant funds on direct services 

[ j Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[x] Existing Site(s) [ ] Existing Structure(s) [x Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ j Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

[ j New Site(s) [ ] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer: Ron Fong 
Date Reviewed: ^*C>\ ^^ i^T- 



fBBs23 ^ » 

Department Approval: 



^^cvu\l A h-Q^^u, I\*xza-J\ PvpA -l>oc/avi lVW«-yt^ 

(Title) . ; ^J 





86 



File Number. Attachment TT 

(Provided by Clerk of Board of Supervisors) Page 3 of 10 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: BAAQMD Grant 01-Light Duty Supplemental 

2. Department: Airport Commission 

3. Contact Person: Roger Hooson Telephone: (650) 821-6511 

4. Grant Approval Status (check one): 

[x] Approved by funding agency [ ] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: S 9,000 

6a. Matching Funds Required: $ None 
b. Source(s) of matching funds (if applicable): 

7a. Grant Source Agency: Bay Area Air Quality Management District 
b. Grant Pass-Through Agency (if applicable): 

8. Proposed Grant Project Summary: 

One San Francisco International Airport door-to-door van operator will acquire a total of 2 vans, both 
dedicated natural gas. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: 7/02 End-Date: 12/02 

10. Number of new positions created and funded: None 

11. If new positions are created, explain the disposition of employees once the grant ends? N/A 
12a. Amount budgeted for contractual services: None 

b. Will contractual services be put out to bid? N/A 

c. If so, will contract services help to further the goals of the department's MBE/WBE 

requirements? N/A 

d. Is this likely to be a one-time or ongoing request for contracting out? N/A 



87 






13a. Does the budget include indirect costs? [ ] Yes [x] No Attachment IT 

Page 4 of 10 
b1. If yes, how much? $ 

b2. How was the amount calculated? 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [x] To maximize use of grant funds on direct services 

[ j Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[x] Existing Site(s) [ ] Existing Structure(s) [x Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ ] Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

[ j New Site(s) [ ] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 



Comments: 

Departmental or Mayor's Office of Disability Reviewer: Ron Fong 
Date Reviewed: "^O \ "H? Q\. 






Department Approval: l^o^vgyld V*z>r\c-^ C\v\ JfiA-T PvQ A -Wo *yz<^ lW^ict-< . 

(Name) J j (Title) —^ ^J 



(Signature) 



88 



File Number: . Attachment 17 

(Provided by Clerk of Board of Supervisors) Page 5 of 10 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1. Grant Title: BAAQMD Grant 02-Heavy Duty CNG 

2. Department: Airport Commission 

3. Contact Person: Roger Hooson Telephone: (650) 821-6511 
A. Grant Approval Status (check one): 

[ ] Approved by funding agency [x] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $ 440,000 

6a. Matching Funds Required: $ None 
b. Source(s) of matching funds (if applicable): 

7a. Grant Source Agency: Bay Area Air Quality Management District 
b. Grant Pass-Through Agency (if applicable): 

8. Proposed Grant Project Summary: 

Three San Francisco International Airport off-Airport parking operators, 3 SFIA hotel courtesy shuttle 
operators, 1 crew shuttle operator, and 1 scheduled airporter operator will acquire a total of 30 cutaway 
minibuses and 1 mid-size bus, all dedicated natural gas. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: 11/02 End-Date: 11/04 

10. Number of new positions created and funded: None 

11. If new positions are created, explain the disposition of employees once the grant ends? N/A 
12a. Amount budgeted for contractual services: None 

b. Will contractual services be put out to bid? N/A 

c. If so, will contract services help to further the goals of the department's MBE/WBE 

requirements? N/A 

d. Is this likely to be a one-time or ongoing request for contracting out? N/A 



89 



13a. Does the budget include indirect costs? [ ] Yes [x] No Attachment n 

Page 6 of 10 

b1 If yes, how much? $ 

b2. How was the amount calculated? 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [x] To maximize use of grant funds on direct services 

[ ] Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[x] Existing Site(s) [ ] Existing Structure(s) [x Existing Program (s) or Service(s) 

[ ] Rehabilitated Site(s) [ j Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

[ ] New Site(s) [ ] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer: Ron'Fong 
Date Reviewed: ^ggj ^-U ; Q- L— 

Department Approval: Kcx/\^V<^' Ucyi^ ^\a^,^s\ l\~V\ j^/a^ W\jC^^l^ gv 

(Name) J ■ ^ (Title) [j c_J 




(Signature 



90 



File Number: Attachment II 

(Provided by Clerk of Board of Supervisors) Page 7 of 10 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1. Grant Title: BAAQMD Grant 02-Heavy Duty LPG 

2. Department: Airport Commission 

3. Contact Person: Roger Hooson Telephone: (650) 821-6511 

4. Grant Approval Status (check one): 

[ ] Approved by funding agency [x] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $ 490,000 

6a. Matching Funds Required: $ None 
b. Source(s) of matching funds (if applicable): 

7a. Grant Source Agency: Bay Area Air Quality Management District 
b. Grant Pass-Through Agency (if applicable): 

8. Proposed Grant Project Summary: 

The major San Francisco International Airport hotel courtesy shuttle contractor will acquire a total of 14 mid- 
size buses, all dedicated propane. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: 11/02 End-Date: 11/04 

10. Number of new positions created and funded: None 

11. If new positions are created, explain the disposition of employees once the grant ends? N/A 
12a. Amount budgeted for contractual services: None 

b. Will contractual services be put out to bid? N/A 

c. If so, will contract services help to further the goals of the department's MBE/WBE 

requirements? N/A 

d. Is this likely to be a one-time or ongoing request for contracting out? N/A 



91 



13a. Does the budget include indirect costs? [ ] Yes [x] No Attachment n 

Page 8 of 10 
bllf yes, how much? $ 

b2. How was the amount calculated? 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [x] To maximize use of grant funds on direct services 

[ ] Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[x] Existing Site(s) [ ] Existing Structure(s) [x Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ ] Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

[ ] New Site(s) [ ] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal. State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer: Ron Fong 
Date Reviewed: \2j n^<^ K Cn_ 



Department Approval: ^-c^u^X A Ho^g-, , ^■ / ^^t^---X i^QA Y<nz*\f>u^\ iWk/v^fl^ . 

(Name) ) I (Title) ^ '. ' (J 




92 



File Number: n 

(Provided by Clerk of Board of Supervisors) Attacnmeni 11 

Page 9 of 10 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: BAAQMD Grant 02-Light Duty Low Mileage 

2. Department: Airport Commission 

3. Contact Person: Roger Hooson Telephone: (650) 821-6511 

4. Grant Approval Status (check one): 

[ ] Approved by funding agency [x] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $ 99,000 

6a. Matching Funds Required: $ None 
b. Source(s) of matching funds (if applicable): 

7a. Grant Source Agency: Bay Area Air Quality Management Distn'ct 
b. Grant Pass-Through Agency (if applicable): 

8. Proposed Grant Project Summary: 

Three San Francisco International Airport door-to-door van firms, and 3 hotel courtesy shuttle operators will 
acquire a total of 22 vans, all dedicated natural gas. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: 11/02 End-Date: 11/03 

10. Number of new positions created and funded: None 

11. If new positions are created, explain the disposition of employees once the grant ends? N/A 
12a. Amount budgeted for contractual services: None 

b. Will contractual services be put out to bid? N/A 

c. If so, will contract services help to further the goals of the department's MBE/WBE 

requirements? N/A 

d. Is this likely to be a one-time or ongoing request for contracting out? N/A 



93 



13a. Does the budget include indirect costs? [ ] Yes [x] No 

Attachment TT 

b1. If yes, how much? $ Page 10 of 10 

b2. How was the amount calculated? 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [x] To maximize use of grant funds on direct services 

[ j Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[x] Existing Site(s) [ ] Existing Structure(s) [x Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ ] Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

[ ] New Site(s) [ j New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer: Ron Fong 
Date Reviewed: <= >^>\ vCo O?, 

Department Approval: ft-o^Vel ^ A<; Av^^jn lOOA V > \£^fZ-cA ^WUA^g 

(Name) ^_^^ ) \ (Title) ZJ ^ 




94 



Memo to the Finance Committee 

December 18, 2002 Finance Committee Meeting 

Item 13 - File 02-1939 



Department: 
Item: 



Grant Period: 



Department of Parking and Traffic (DPT) 

Resolution authorizing a six-month extension to an 
existing grant agreement between the City and County of 
San Francisco and City CarShare, a nonprofit 
organization. 

Six-month extension from January 1, 2003 to June 30, 
2003 to a Grant Agreement, which expires on December 
31, 2002. 



Description: 



On November 20, 2000, the Board of Supervisors 
authorized the Executive Director of the Department of 
Parking and Traffic (DPT), a Department now under the 
Municipal Transportation Authority, to enter into a grant 
agreement with City CarShare, a nonprofit organization. 
Under this proposed six month extension to the 
agreement, through June 20, 2003, the DPT will continue 
to provide City CarShare with 31 parking spaces free of 
charge in nine City-owned garages for City CarShare 
vehicles. Under the existing agreement which expires on 
December 31, 2002, the DPT acts as the financial 
intermediary in the administration of the previously 
awarded $742,000 FHWA grant, for the City CarShare 
Program. 

The City CarShare Program is a neighborhood-based 
transportation program, operated by City CarShare, a 
nonprofit organization, and is designed to reduce the 
number of vehicles in an urban area. Members of the City 
CarShare Program, which began operation in March of 
2001, can rent a vehicle from City CarShare's fleet of 60 
vehicles on an as-needed basis. Individuals, businesses, 
nonprofit organizations and government offices can 
become a member of the City CarShare Program. 1 
Attachment I to this report, provided by Ms. Elizabeth 
Sullivan of City CarShare, lists the number of current 
City CarShare members and the number of vehicles 
owned by City CarShare. According to Ms. Sullivan of 



1 Members of the City CarShare Program pay City CarShare. a nonprofit organization, (a) a $300 
one-time refundable damage deposit, (b) a $10 monthly administrative fee, (c) and an hourly use fee 
of $3.50, capped at ten hours or $35 per day, and (d) a per mile charge of $.37. 



95 



Memo to the Finance Committee 

December 18, 2002 Finance Committee Meeting 



Comments: 



Recommendation: 



City CarShare, City CarShare currently serves 
approximately 2,100 members with 60 vehicles in 
locations throughout San Francisco. Ms. Sullivan states 
that the City provides 31 parking space in nine City 
owned garages and City CarShare contracts with other 
non-city garages, for 29 additional parking spaces. 

1. According to Ms. Diana Hammons of DPT, the loss of 
revenue to the City from providing the 31 parking spaces 
free of charge is approximately $3,170 monthly or $38,040 
annually. As shown in Attachment II, the proposed six- 
month extension to the January 1, 2001 Grant Agreement 
would therefore result in a continued loss of parking 
garage revenue to the City of approximately $19,020 
($3,170 monthly cost x 6 months equals $19,020). 

2. Ms. Hammons notes that the terms of the January 1, 
2001 Grant Agreement provided that DPT act as the 
financial intermediary in the administration of the 
$742,000 FHWA grant from January 1, 2001 through 
December 31, 2002. Ms. Hammons advises that the 
$742,000 in grant funds have been fully expended and 
therefore, the DPT will not continue to serve as the 
financial intermediary. According to Ms. Hammons, the 
proposed six-month grant extension would authorize the 
City to continue to provide the 31 parking spaces in the 
nine City owned garages free of charge. 

Approval of the proposed resolution is a policy matter for 
the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

96 



12^,12/2802 13:38 4159958589 



CITY CARSHARE 



PAGE 02 



Attachment I 



MEMO 

TO: Elaine Forbes, Budget Analyst's Office 

FROM: Elizabeth Sullivan, Executive Director 

DATE: 12/11/02 

RE: Description of City CarShare 



As of December 1 1 , 2002, City CarShare currently leases and operates a fleet of 60 
vehicles in the city of San Francisco. 

Our membership totals 2,100 people. 



• it jf! ,... til': ' ..i ' I i- 

n -i 



Attachment 1 1 



Costs for Existing City Carshare Program Vehicles in City Garages 





Number of 
Vehicles 


Cost Per Month 

(Proposed 
Carsharing Rate) 


Six-Month 
Cost 


5th and Mission 


6 


$600 


$3,600 


Mission/Bartlett 


5 


$250 


$1,500 


Golden Gateway 


3 


$525 


$3,150 


Performing Arts 


3 


$225 


$1,350 


Vallejo Street 


4 


$600 


$3,600 


St. Mary's Square 


3 


$540 


$3,240 


SFGH 


3 


$180 


$1,080 


16th &Hoff Street 


2 


$100 


$600 


Civic Center Garage 


2 


$150 


$900 


TOTAL 


31 


$3,170 


$19,020 



Source: DPT, December 10, 2002. 



12/10/02 



Prepared by: Scott Ruble 
Diana Hammons 



98 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

Item 14 - File 02-1978 



Department: 



Item: 



Amount: 
Source of Funds: 
Description: 



Department of Public Health (DPH) 

Resolution authorizing adoption of the County 
Description of Proposed Expenditure of California 
Healthcare for Indigents Program (CHIP) funds for Fiscal 
Year 2002-03, and authorizing the President of the Board 
of Supervisors, or the duly authorized representative of 
the Board of Supervisors of the City and County of San 
Francisco, to certify the County Description of Proposed 
Expenditure of CHIP funds for FY 2002-2003. 

$3,950,687 

California Healthcare for Indigents Program (CHIP) 

The State Department of Health Services established the 
California Healthcare for Indigents Program (CHIP) in 
1989 to provide funds to California counties to pay for 
medical services for indigent persons who are not eligible 
for other private or public health care programs. CHIP is 
funded by Proposition 99 (Tobacco Tax) money. California 
counties use CHIP funds to reimburse both County and 
non-County providers for uncompensated services for 
indigent persons who are not able to otherwise pay for the 
cost of such health services. 



CHIP funds are used to reimburse (a) participating 
County and non-County hospitals for inpatient, 
outpatient, and emergency services, (b) participating 
private physicians for emergency, obstetric and pediatric 
services provided to indigent persons and (c) other 
discretionary health services. 

State regulations require that the County submit to the 
State, on an annual basis, a description of the County's 
proposed expenditures of CHIP funds, and that the 
President of the Board of Supervisors, or the Board of 
Supervisors duly authorized representative, certify the 
subject expenditure description. 

The proposed resolution would authorize the adoption of 
the County Description of Proposed Expenditure of the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 

California Healthcare for Indigents Program (CHIP) 
funds for FY 2002-2003 and authorize the President of the 
Board, or the Board's duly authorized representative, to 
certify the County Description of Proposed Expenditure 
for the FY 2002-2003 CHIP Funds. 

Proposed 
Expenditures of 

CHIP Funds: The allocation of the CHIP funds for FY 2002-2003 is as 

follows: 

County Hospital Funds $3,007,890 

Non-County Hospital Funds 

Non-County Hospital Formula Funds $80,584 

Non-County Hospital Discretionary Funds 80.584 

Subtotal 161,168 

Other Health Services Funds 781.629 

Total CHIP Funds $3,950,687 

Comments: 1. As shown in the Attachment provided by the DPH, the 

CHIP allocation b}' each categorj^ noted above, is as 
follows: 

County Hospital Funds 

DPH has allocated $3,007,890 of County Hospital Funds 
for indigent services at San Francisco General Hospital 
(SFGH), the Child Health and Disability Prevention 
(CHDP) services at SFGH, and administrative costs as 
follows: 

San Francisco General Hospital (SFGH) Services $2,460,524 
Child Health and Disability Prevention (CHDP) 

Services at SFGH 118,523 

DPH Administrative Costs 428.843 

Total County Hospital Funds $3,007,890 

Non-Countv Hospital Funds 

DPH has allocated $161,168 to the Non-County Hospital 
Fund, including $80,584, or 50 percent, to six local non- 
County hospitals (California Pacific Medical Center, 
Chinese Hospital, University of California at San 
Francisco Medical Center, St. Francis Hospital, St. Luke's 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

100 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



Hospital and St. Mary's Hospital), based on the State's 
mandated formula, and $80,584, or 50 percent, to 
reimburse these same six local non-County hospitals on a 
discretionary basis. 

State-mandated Funds $80,584 

Discretionary Funds 
Hospital Reimbursement 71,720 

Professional Services Contract 8,864 

Subtotal Discretionary Funds 80-584 

Total Non-County Hospital Funds $161,168 

Mr. Jeffrey Leong of DPH states that DPH has an 
existing professional services contract with Lifemark, 
Incorporated, to process medical claims for 
reimbursement to private hospitals. Mr. Leong advises 
that Lifemark reviews claims for verification of services 
rendered and subsequently issues payment to the private 
hospitals from the CHIP Non-County Hospital Funds 
aUocation. 

Other Health Services Funds 

DPH has allocated $781,629 for other health services, 
including reimbursements for indigent services at SFGH 
and Child Health and Disability Prevention (CHDP) 
services at SFGH, and administrative costs. 



SFGH 


$692,195 


CHDP 


14,273 


DPH Administrative Costs 


75.161 


Total Other Health Services Funds 


$781,629 



Mr. Leong advises that the Other Health Services Funds 
are allocated as discretionary funds for medical services 
provided to indigents at the San Francisco General 
Hospital in the same manner as the County Hospital 
Funds. However the State Department of Health Services 
distributes the funds under both the County Hospital 
Funds category and the Other Health Services Funds 
category. 



BOARD OF SUPERVISORS 



BUDGET ANALYST 



Memo to Finance Committee 

December 18, 2002 Finance Committee Meeting 



According to Mr. Leong, the final total State allocation to 
San Francisco for FY 2002-2003 is $3,950,687, which is 
$185,769, or approximately 4.5 percent, less than the 
previously authorized amount of $4,136,456 for FY 2002- 
2003. 

2. The Board of Supervisors approved total CHIP Fund 
expenditures of $4,136,456 in the DPH's FY 2002-2003 
budget. In September of 2002, the Board of Supervisors 
authorized DPH to accept and expend up to $4,136,456 in 
CHIP funds (File 02-1533). Mr. Leong states that the 
reduction in the State allocation of CHIP funds resulted 
from changes in the California FY 2002-2003 budget that 
diverted Tobacco Tax funds from the CHIP-funded County 
services. In response to the Budget Analyst's inquiries 
regarding the State's potential reductions in the FY 2002- 
2003 CHIP Fund allocations to San Francisco Mr. Leong 
advises that the State Department of Health Services has 
the option of making further changes to the $3,950,687 
allocation before the end of the current fiscal year. 
However, Mr. Leong also advises that the State 
Department of Health Services, the Governor and the 
Legislature, are unlikely to make any additional changes. 
Mr. Leong advises that the $185,769 reduction in the 
CHIP allocation to San Francisco will be offset by a 
service reduction and will not result in increased General 
Fund contributions to DPH for FY 2002-2003. 



Recommendation: 



Approve the proposed resolution. 



cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 




-5V 



>4-u^ 



arvey M. Rose 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

102 



Attachment 
Page 1 of 6 



COUNTY OF San Francisco 
FY 2002-03 DESCRIPTION OF PROPOSED EXPENDITURES 
OF CH1P/RHS PROGRAM FUNDS 
HOSPITAL SERVICES FUND DETAIL SHEET 

COUNTY HOSPITAL FUNDS 



County Hospital Allocation 



$3,&0?,&90 



interest Carryover from Prior Year 



Projected Interest for FY 2002-03 



Totaf 



$3,007,890 



Proposed Expenditures for Services 





^""5 "'''-■ VJ-sraB£?Jlw'''^ft^-'sias 










HCHCHIPSVCS 


sfsh 








$2,460,52* 





































































Proposed Expenditures for Administrative Costs 





^^^^^^^^^^^^^ 










HCECHIPADMIK 


CHS 


$425,525 


HLECHIP&DMIK 


CSS (-overhead) 


2,318 















Proposed Expenditures for CHDP Treatment Services 

(Expenditures should be reported on CHDP DetaO Sheet) 



jyfrjf^ '-''iSKslSISfcfryssss 








^j 


3SSt»*^5J^^^S 




^^Mp^S&SSS 


IISee 






^^^te,-Sr5l5?we*l 


BBCH2MHIS 


SFGR 


!MlR.«i?1 






















|Total - Proposed Expenditures for Services, Admin and CHDP 


$3,007,890 



103 



Attachment 
Page Z of 6 
COUNTY OF San Francisco 

FY 2002-03 DESCRIPTION OF PROPOSED EXPENDITURES 
OF CHIP/RHS PROGRAM FUNDS 
HOSPITAL SERVICES FUND DETAIL SHEET 

NONCOUNTY HOSPITAL FORMULA FUNDS 



-■ .■,—:■ -.•-.-■.,■■-"_"■■ ".- .":. \^mmmm' ^ - -' :--■ --•--■ -.-';?:■■:. ,-• ■ o^msmM^M^^ 


Noncounty Hospital Formula Allocation 


$80,584 


Interest Carryover from Prior Year 




Projected Interest for FY 2002-03 




Total 


$80,584 



Proposed Expenditures for Services 





mzm-^^^&i 


^-©B^WiliMS^Il^^T-^T -:-;: : -"-:-i- "■■araSM"'^'-' ' :')■- -■ r- -'■' •'-■". :;:'!.: 


BtSHBg^w^jiftt^Hlifr^gj 


HCHCHIPSVCS 


Medical Svcs. Cts. 


$80,584 































































































































































Total - Proposed Expenditures for Services 


S80.584 



1C4 



Attachment 
Page 3 of 6 

COUNTY OF San Francisco 

FY 2002-03 DESCRIPTION OF PROPOSED EXPENDITURES 
OF CHIP/RHS PROGRAM FUNDS 
HOSPITAL SERVICES FUND DETAIL SHEET 

NONCOUNTY HOSPITAL DISCRETIONARY FUNDS 



[Kl^M©^^^ 


^^^^^^^maamss^^^^^ 


Noncounty Hospital Discretionary Allocation 


S80.584 


Interest Carryover from Prior Year 




Projected Interest for FY 2002-03 




Total 


$80,584 



Proposed Expenditures for Services 



h|nBng^HHB^BBnBHBn|BHnnH^^^^^gl^^^^^^^^^^^^ 


HCHCHIPSVCS 


Medical Svcs. Ets. 


$71,720 



















































Proposed Expenditures for Administrative Costs 



RSH RiHfn np tS N 1 n i tSit^Pm 




8BSS8H 


HCHCHIPSVCS 


Professional Svcs.' 


$8,864 























Proposed Expenditures for CHDP Treatment Services 

(Expenditures should be reported on CHDP Detail Sheet) 


iJPBJ^a^^^^^P 


lilllaJfliPSMMrfr^ 


§K>' 



























Total - Proposed Expenditures for Services, Admin and CHDP 



$80,584 



105 



Attachment 
Page 4 of 6 

COUNTY OF San Francisco 

FY 2002-03 DESCRIPTION OF PROPOSED EXPENDITURES 

OF CHIP/RHS PROGRAM FUNDS 

PHYSICIAN SERVICES FUND DETAIL SHEET 

EMERGENCY MEDICAL SERVICES (EMS) FUNDS 



K- ■'■■■■:■■"'-•"'-'■'-'- -.:-• -.::..■-:.- r ^'Mmmw^m ,%.--■-.■.' : "-" -..;.,;:•,: :-"■•:'> il| •,.- :■ y. Miffilfe-''^ 


PSA - EMS Allocation 


$0.00 


Interest Carryover from Prior Year 




Projected Interest for FY 2002-03 




Total 


SO. 00 



Proposed Expenditures for Services 



|: : v'[lM!@M[y)ui!lS :-:\'rr -.";. .■. -.:■_ V : :-- jlfa@3©:. " \.' y.-y~ J 'y\\, • /kmSfas^.-.^A 


m 


HCHCHIPSVCS 


Medical Svcs. Cts. 


$0.00 

























































































Proposed Expenditures for Administrative Costs 

(Administrative Costs cannot exceed 10% of PSA) 




fe:IMfeG'(WS : ;;:: Wy':- : 'v- ' : - -.;>: '-W®. ;-;:.:■ '.': ' ; m:MAC& 1 ri y :: ::&mmm^ 




HCHCHIPSVCS 


Professional Svcs. 


$0.00 





















Total - Proposed Expenditures for Services and Admin. Costs 



so-oo 



106 



Attachment 
Page b of 6 
COUNTY OF San Francisco 

FY 2002-03 DESCRIPTION OF PROPOSED EXPENDITURES 
OF CHIP/RHS PROGRAM FUNDS 
PHYSICIAN SERVICES FUND DETAIL SHEET 

NEW CONTRACT FUNDS 



ri^:': :'-:/^: '.--;: ; r:X "-^^^l^Sfefe^:-: -'• -.-.- ^M^S^^^; : ^4mSs4 


HHH : . " 


PSA - NeW Contract Allocation (Not to exceed 50% of the total FSA. For CHIP counties only.) 


so. 00 


Interest Carryover from Prior Year 




Projected Interest for-FY 2002-03 




Total 


$0.00 



Proposed Expenditures for Obstetric Services 




Proposed Expenditures for Pediatric Services 



^/MsGfflsm:':^ 





Proposed Expenditures for Emergency Services 


^mmmMm^ ^pi-z::-,:. ;.?-;;:; v' :.. : : \mm-':r^M:v :.::-:~^~ :; 1 


immmmsmm^mmz 


HCHCEIPSVCS 


Medical Svcs. Cts. 


$0.00 















Proposed Expenditures for Administrative Costs 

(Administrative Costs cannot exceed 10% of PSA) 



HPP5£PmP 


miismiamMMmmm\m-m^mmmMmiasmia^ 


■ ■■■null flrarassiw©?^. ■ 


HCHCEIPSVCS 


Professional Svcs. 


sn.on 












■ 



Proposed Expenditures for CHDP Treatment Services 

(Expenditures should be reported on CHDP Detail Sheet) 



BBBjEJETOlllp-ffifl^ 


■^i^^r^r..-^-iriux-^ssm -^v::; :-: - .. . ,:•-..,;- |j :.^'--^&m8im£asM 


HCHCHIPSVCS 


Medical Svcs. Cts. 


SO. CO 















[Total - Proposed Expenditures for Services, Admin and CHDP 



sn.oo 



107 



Attachment- 
Page b of" 6 

COUNTY OF San Francisco 

FY 2002-03 DESCRIPTION OF PROPOSED EXPENDITURES 
OF CHIP/RHS PROGRAM FUNDS 
OTHER HEALTH SERVICES (OHS) FUND DETAIL SHEET 



■jMsmssmm 



OHS Allocation 



$781,629 



Interest Carryover from Prior Year 



Projected Interest for FY 2002-03 



Total 



$781,629 



Proposed Expenditures for Services 



maemmmm 



HCHCHIPSVCS 



SFGH 



$692,195 



HCHCHIPSVCS 



Proposed Expenditures for Administrative Costs 



CHS (overhead) 



$75,161 



Proposed Expenditures for Equipment 

(Up to 5% or $50,000 of funds received. No single purchase may exceed $10,000.) 




Proposed Expenditures for CHDP Treatment Services 

(Expenditures should be reported on CHDP Detail Sheet) 




jTotal - Proposed Expenditures for Services, Admin., Equipment, and CHDP $781 ,629 



108 



>25 

fj 



CITY AND COUNTY 




OF SAN FRA] [Budget Analyst Report] 
Susan Horn 
Main Library-Govt. Doc. Section 






^BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 



REVISED 

TO: ^Finance Committee 

FROM: Budget Analyst 

3 
SUBJECT: January 15, 20Q2 Finance Committee Meeting 

Item 1 - Files 02-1219 



January 9, 2002 

DOCUMENTS DEPT. 
JAN 1 5 2003 

SAN FRANCISCO 
PUBLIC LIBRARY 



Note: At the November 26, 2002 Finance Committee Meeting, an Amendment of 
the Whole for File 02-1219 was submitted to the Finance Committee and the 
item was continued to the January 15, 2003 meeting pending submission by 
the Treasurer/Tax Collector of a supplemental appropriation ordinance to 
implement the Business Tax Penalty Amnesty Program (see companion Item 
2 File 02-2029). 



Department: 
Item: 



Description: 



Treasurer/Tax Collector 

Ordinance amending the Business and Tax Regulations 
Code to: (1) amend Article 6 Sections 6.17-1 through 6.17- 
4 to increase penalties imposed upon businesses who fail 
to: (a) pay the Payroll Tax or the Gross Receipts Tax owed 
to the City, or (b) file a business tax return or who file a 
business tax return subsequent to the City's due dates, 
and (2) amend Article 17 Sections 1700 through 1707 to 
establish a Business Tax Penalty Amnesty Program 
during Fiscal Year 2002-2003 for penalties owed to the 
City on delinquent annual Business Registration 
Certificate fees and on delinquent Payroll Tax and Gross 
Receipts Tax for tax periods ending on or before December 
31, 2001. 

Prior to January 1, 2000, firms doing business in the City 
were required to pay the City either the Payroll Tax or 
the Gross Receipts Tax. whichever was higher, as an 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



excise tax for engaging in business in the City. The City 
currently imposes only the Payroll Tax on firms engaged 
in business in the City since the Gross Receipts Tax was 
repealed on January 1, 2000 (Ordinance No. 63-01). The 
proposed ordinance would apply to penalties on both the 
Payroll Tax and the Gross Receipts Tax, depending on the 
tax periods for which the penalty applies. 

In addition to paying business taxes, firms engaging in 
business in the City must obtain an annual Business 
Registration Certificate from the Office of the 
Treasurer/Tax Collector's Office. Business Registration 
Certificate fees and -business taxes are remitted to the 
City's General Fund. Businesses that (a) fail to obtain an 
annual Business Registration Certificate or fail to obtain 
their Business Registration Certificate by the Certificate's 
due date, (b) fail to file a business tax return or file such 
returns subsequent to the City's due dates, or (c) fail to 
pay their business taxes owed to the City, are subject to 
penalties as set forth in Article 6 Sections 8.17-1 through 
6.17-4 of the Business and Tax Regulations Code. 

The proposed ordinance would amend the Business and 
Tax Regulations Code as follows: 

• Amend Section 6.17-1 to increase the penalty for 
failure to pay the required business taxes. Under 
current law, businesses are subject to penalties of 5% 
of the amount of the delinquent taxes for each month 
or fraction of the month from the time the tax becomes 
delinquent until paid, not to exceed 20% in the 
aggregate. Under the proposed ordinance, the not-to- 
exceed penalty would increase from 20% of the amount 
of delinquent taxes to 25% of the amount of the 
delinquent taxes. In addition, the proposed ordinance 
would amend Section 6.17-1 to increase the additional 
penalty for failure to pay any business taxes for a 
period of 90 days after notification by the Tax 
Collector's Office that the tax is delinquent, from the 
current flat penalty of 20% of the amount of the 
delinquent taxes to a flat penalty of 25% of the amount 
of the delinquent taxes. 

* Amend Section 6.17-2 to increase the penalty for 
underreported business taxes. Under current law, 
businesses are subject to penalties of 5% of the amount 



BUDGET ANALYST 
2 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



of the underreported tax for each month or fraction of 
the month from the time the tax becomes delinquent 
until paid, not to exceed 20% in the aggregate. Under 
the proposed ordinance, the not-to-exceed penalty- 
would increase from 20% of the amount of delinquent 
taxes to 25% of the amount of the delinquent taxes. 

• Amend Section 6.17-3 to increase the penalty for 
failure to file a business tax return that is required by 
the Business and Tax Regulations Code from the 
current penalty of $100 to $250 for each such failure to 
file. 

• Amend Section 6.17-4 to add a provision stating that, 
during the proposed amnesty period (see below), for 
any business that applies for and receives a waiver of 
penalties under the proposed Business Tax Penalty 
Amnesty Program, the Tax Collector may not waive or 
otherwise reduce interest for the period or periods 
covered by the business' amnesty application. Under 
the current and proposed amended Business and Tax 
Regulations Code, interest accrues at the rate of one 
percent per month, or fraction of a month, from the 
date that business taxes become delinquent. 

• Amend Article 17 to establish a Business Tax Penalty 
Amnesty Program in Fiscal Year 2002-2003. Under the 
proposed ordinance, the Tax Collector would designate 
by February 1, 2003 a 60-day amnesty application 
period to begin on or after March 1, 2003 and to 
conclude on or before June 30, 2003, during which 
time the Tax Collector would accept applications to 
participate in the Business Tax Penalty Amnesty 
Program for Fiscal Year 2002-2003. According to Mr. 
George Putris of the Treasurer/Tax Collector's Office 
the last such Business Tax Penalty Amnesty Program 
approved by the Board of Supervisors was in FY 1994- 
1995. 

• Adds Section 1700.5 to include a Statement of Intent 
regarding future Business Tax Penalty Amnesty 
Programs to state that it is the intent of the Board of 
Supervisors that future amnesty programs could not 
take place for at least five years following the 
conclusion of the proposed amnesty period. 

Liabilities that would be forgiven under the proposed 
Business Tax Penalty Amnesty Program as set forth in 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



the proposed amended Article 17 of the Business and Tax 
Regulations Code include penalties owed for failure to pay 
annual Business Registration Certificate fees, penalties 
owed for failure to file a business tax return or for filing 
late, and penalties owed for failure to pay business taxes 
for tax periods ending on or before December 31, 2001. 
According to Mr. Dorji Roberts of the City Attorney's 
Office, under the proposed ordinance, a penalty for failure 
to file a business tax return on a timely basis, resulting in 
any loss or partial loss of eligibility for the Small Business 
Exemption would be deemed a penalty subject to waiver 
under the proposed Business Tax Amnesty Program. 1 

Liabilities that would not be forgiven under the proposed 
Business Tax Penalty Amnesty Program include unpaid 
Business Registration Certificate fees, unpaid business 
taxes, accrued interest on delinquent taxes, penalties 
owed as a result of a jeopardy determination 2 that has 
become final prior to the 60-day amnesty application 
period, penalties paid prior to the amnesty period, and 
penalties owed which are related to any determination 
under administrative review, or penalties owed that are 
included in any civil tax collection litigation commenced 
by the Tax Collector, prior to the 60-day amnesty 
application period. 

To qualify for the Business Tax Penalty Amnesty 
Program, a business must: (a) file completed business tax 
returns for all periods for which the business has not 
previously filed a business tax return or not filed an 
amended business tax return for all periods for which the 
business underreported taxes owed to the City, (b) pay in 
full all business taxes and interest due to the City, and (c) 
execute a written waiver of the business' rights to seek a 
refund of the amounts paid to the Tax Collector for all 
periods for which the business submits a tax penalty 



1 According to Mr. Roberts, if a business owes $2,500 or less in payroll taxes to the City and files a 
timely business tax return, then the business is exempt from payment of the tax under the Small 
Business Exemption. If a business fails to file a business tax return on time, even though the 
business owes $2,500 or less in payroll taxes, the business would still be subject to penalties. 
Depending on the year at issue, the business would either lose its Small Business Exemption status 
entirely, or be subject to a graduated penalty according to Mr. Roberts. Such penalties would be 
subject to waiver under the proposed Business Tax Penalty Amnesty Program. 

2 Mr. Mark Buckley of the Treasurer/Tax Collector's Office explains that a jeopardy determination is 
when the timeline for payment of taxes is expedited due to the potential flight risk of the taxpayer. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

amnesty application under the proposed Business Tax 
Penalty Amnesty Program. The proposed ordinance 
requires that when a business qualifies to participate in 
the proposed Business Tax Penalty Amnesty Program, 
and that business enters into an installment payment 
agreement with the City to repay in full over time its 
delinquent business taxes, related interest, and/or fees, 
then the business must pay upfront 50 percent of the 
outstanding balance due to the City. 

If a business qualifies to participate in the Business Tax 
Penalty Amnesty Program, the Tax Collector shall: (a) 
waive all penalties for failure to pay annual Business 
Registration Certificate fees or failure to file a business 
tax return, 0^) waive all penalties for delinquent business 
taxes, (c) refrain from initiating proceedings to suspend or 
revoke the Business Registration Certificate previously 
issued to the business, and (d) refrain from initiating any 
civil action against the business for the tax periods for 
which the tax penalty amnesty is granted. 

Comments: 1. The Attachment is a memorandum from Mr. Putris 

showing the results of the last 1995 Amnesty Program. 
According to Mr. Putris, the 1995 Business Tax Penalty 
Amnesty Program was effective from December 1, 1994 to 
January 31, 1995. The Attachment shows that as a result 
of the 1995 Business Tax Penalty Amnesty Program, the 
City realized $4,949,336 in delinquent Business 
Registration Certificate fees and business taxes offset by 
additional City costs of $770,952, for a net revenue gain to 
the City of $4,178,384. Mr. Putris reports in the 
Attachment that "the aggregate amount of penalties 
waived in connection with the 1995 Amnesty Program 
were not recorded at the time and cannot easily be 
determined now." The Treasurer/Tax Collector's Office 
has no information on the amount of revenue forgone by 
the City under the 1995 Amnesty Program, representing 
penalties on the delinquent taxes and Business 
Registration Certificate fees. 

2. Mr. Putris states in the Attachment, "If all delinquent 
taxpayers with collectable accounts availed themselves of 
the proposed Business Tax Penalty Amnesty Program, the 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



total amount of outstanding penalties subject to 
forgiveness would be $12,466,561." 

3. The Treasurer/Tax Collector's Office is requesting a 
supplemental appropriation (see Item 2, File 02-2029) of 
$998,992 for FY 2002-03 to cover the costs of staff time 
and related costs that would be required to process 
applications for the Business Tax Penalty Amnesty 
Program should this proposed ordinance (File 02-1219) be 
approved by the Board of Supervisors. Mr. Putris advises 
that the supplemental appropriation request of $998,992 
is the amount of additional funds that the Treasurer/Tax 
Collector's Office would require if the applications to 
participate in the proposed Business Tax Penalty 
Amnesty Program were to be accepted for a 60-day period. 
According to Ms. Peg Stevenson of the Controller's Office, 
the Controller's Office is only able to certify $297,498 in 
increased business tax revenues to pay for the requested 
supplemental appropriation of $998,992. Ms. Stevenson 
advises that the amount of $297,498 represents the 
estimated amount at this time which the Controller 
believes would be realized by the City as a result of the 
proposed Business Tax Penalty Amnesty Program. 

4. As previously noted, an increase in penalties would be 
imposed on businesses (a) which fail to pay business taxes 
owed to the City, from the current not-to-exceed penalty 
of 20% of the amount of taxes owed to a proposed not-to- 
exceed penalty of 25% of the amount of taxes owed, or (b) 
which fail to file a business tax return, whereby the 
current penalty of $100 would be increased to a penalty of 
$250. Mr. Putris advises that the Treasurer/Tax 
Collector's Office is unable to estimate the additional 
revenues to the City which would result from the 
increased penalties under the proposed ordinance. 

5. The Budget Analyst notes that while business tax 
collections may increase during the amnesty period, much 
of that revenue might be collected without an amnesty 
program, simply as a result of the Tax Collector's normal 
auditing and collection procedures. The Attachment 
includes a flow chart of the business tax filing and 
collection process. As previously noted, the Treasurer/Tax 
Collector's Office has no information on the forgone 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

6 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

revenues to the City from the 1995 amnesty program. As 
also previously noted, Mr. Putris estimates that the 
amount of penalty revenues which may be forgone by the 
City if the proposed Business Tax Penalty Amnesty 
Program is approved by the Board of Supervisors is 
$12,466,561. 

6. Although, at this time, the Controller is only able to 
certify $297,498 in additional increased revenue which 
may result from the proposed Business Tax Penalty 
Amnesty Program, it is possible that additional revenues 
would be realized by the City. Further, such a Program 
could result in improved compliance with the City's 
business tax laws and could result in an increase to the 
City's business tax base if the number of currently 
unregistered businesses use the amnesty program to 
become registered with the City. The potential for an 
increased number of registered businesses could therefore 
be viewed as a long term revenue benefit resulting from 
the proposed Business Tax Penalty Amnesty Program. 

Recommendation: Approval of the proposed ordinance is a policy decision for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 




SUSAN LEAL 
Treasurer 



DATE: 

TO: 

FROM: 

SUBJECT: 

CC: 



Office of the Treasurer & Tax Collector 
City and County of San Francisco 

Street Address: 1 Dr. Carlton B. Goodlett Place. City Hall, Room 140 

San Francisco, CA 94102 

Mailing Address: P.O. Box 7425, San Francisco, CA 94120-7425 



Original: September 25, 2002; Updated: January 9, 2003 

Anna LaForte 

George Putris, Tax Administrator 

Proposed Business Tax Penalty Amnesty Program 

Hon. Susan Leal, Treasurer/Tax Collector 



Attachment 
Page 1 of 4 



GEORGE PUTRIS 
Tax Administrator 



We have considered your questions concerning the proposed Business Tax Penalty Amnesty 
Program and respond as follows: 

1. Program Costs 

Set forth below is an estimated budget for the proposed Business Tax Penalty Amnesty 
Program. This budget relies upon the actual costs incurred during the fiscal year 1994/1995 
Amnesty Program. 

Assumptions: 

■ Inflation rate at 20 percent for programming and materials. Employee compensation set forth 
at current rates. 

■ Total number of businesses participating in the proposed amnesty program same as in the 
prior program; that is, approximately 10,000 applicants, of which 4,500 ultimately required to 
pay delinquent tax obligations. 

■ Additional staff will be needed for a six-month period to complete the processing of 
applications and payment arrangements. 



Temporary Positions 


Cost 


FTE 


Annual 


4222 Sr. Auditor 


$37,284 


.5 


74,568 


4220 Auditor 


5128,856 


2 


64,428 


4308 Collections Officer 


$115,492 


2 


57,746 


1632 Sr. Acct Clerk 


$103,480 


2 


51,740 


1630 Acct Clerk 


S89.388 


2 


44,694 


1424 Clerk Typist 


$43,316 


1 


43,316 










FTE Total 


$517,816 


9.5 




Benefits 


$40,000 






Overhead 









Advertising 


$30,000 






Materials, Supplies, Mailing 8c Programming 


5411,176 






Total 


$998,992. 







A ttac hment 
Page 2 of 4 



2. Supplemental Appropriation Required 

The Treasurer's Office has not included the above-estimated costs in its fiscal year 
2002/2003 budget. Therefore, supplemental appropriations equal to the entire program costs 
would be required. 

3. Aggregate Penalties Subject to Forgiveness Under Proposed Amnesty Program 

If all delinquent taxpayers with collectable accounts availed themselves of the proposed 
Business Tax Penalty Amnesty Program, the total amount of outstanding penalties subject to 
forgiveness would be 512,466,561. 

The total amount collected during the fiscal year 1994/1995 Amnesty Program was 
34,949,336. The total cost of adrninistering such Program was S770,952, of which $249,162 was 
for materials, supplies and programming. The aggregate amount of penalties waived in 
connection with such Program were not recorded at the time and cannot easily be determined 
now. 

4. Delinquent Revenue Collection Process 

The department's Bureau of Delinquent Revenue ("BDR") is primarily responsible for 
identifying and collecting delinquent business tax revenues due and owing to the City and 
County of San Francisco. A summary of BDR's procedures are set forth below: 

■ Delinquent accounts are identified using "on-hold" reports generated daily from DTTS. This 
report reflects registered businesses that have made a payment but, due to a prior year's 
delinquency, have a "hold" on the issuance of a new registration certificate. 

» For delinquent accounts, collectors research and compile all taxes, including business taxes 
and unsecured property taxes (UPP), and send a statement of account to the taxpayer. 

■ Taxpayers contact the office to pay, dispute or clarify the account. If payment in full is 
received, the registration will issue automatically by the Business Tax System ("BTS"). If the 
taxpayer disputes the liability and requests a waiver of penalties, the matter is forwarded to 
Business Tax Section. If the taxpayer sends documentation to substantiate the basis of the 
dispute (e.g., the business closed a year ago), then an adjustment request is forwarded to the 
Taxpayer Assistance or Business Tax Section. 

■ If the taxpayer fails to respond, a second letter is sent. If no response is received, then the 
account is forwarded to Investigations for further action and possibly the recordation of a 
lien. If the amount is under $5,000, the business tax summary judgments procedure maybe 
used. If the amount is over $5,000, the account is forwarded to Legal Section to review for 
possible legal action. 



Attac hment 
Page 3 of 4 

■ Separate from this process, collectors work to proactively identify businesses who are 
delinquent in tax payments in excess of those identified in the "on-hold" report. The 
following means are used: 

i. Cross referencing taxpayer accounts in the BTS and various lists of delinquent 

UPP taxes and other files and list provided by third parties, including Dunn and 
Bradstreet, the Franchise Tax Board, and the State Board of Equalization. This 
cross-checking procedure typically yields the identities of large numbers of 
unregistered businesses. 

ii. Search of the BTS system for large delinquent obligations to collect (also known 
as "cherry picking"). 

iii. Identification of unregistered companies and individuals doing business in the 

City and County of San Francisco using the Internet, periodicals, newspapers, etc. 

The chart attached to this Memorandum provides an overview ofBDR 's collection process. The 
chart outlines procedures associated with the non-payment of business taxes over time and 
reflects the categories of businesses who would be eligible for a new Amnesty Program. 

5. Long Term Results of Prior Amnesty Program 

It is reasonable to assume that some number of unregistered businesses that availed 
themselves of the prior amnesty program paid past and future taxes that would not have been 
collected but for such program. Some of these businesses would probably have been identified by 
BDR in the ordinary course of business; therefore, it is possible that the prior amnesty program 
reduced post-amnesty collections. Stated another way, the amnesty program, by accelerating 
collections to the amnesty period, reduced later collections by a like amount. 

6. Policy Implications Of Amnesty Programs 

The reduction of the number of non-compliant businesses eases BDR's burden of 
discovering and collecting delinquent tax obligations. In addition, amnesty serves to accelerate 
the collection of past due tax obligations. 

Two unintended effects of amnesty program are as follows: 

■ Some of the taxpayers who have diligently complied with the City and County 
of San Francisco's various taxation laws or have actually paid the types of 
penalties forgiven under amnesty programs take exception to what they 
consider the special treatment that non-compliant businesses receive under 
such programs. 

■ In the taxable years following an amnesty program, some non-compliant 
businesses who incur penalties choose not to come forward, choosing instead 
to wait for a future amnesty program. 



10 



Page 4 of 4 

Business Tax Filing & Collection Process 



ALL BUSINESSES 



REGISTERED 



NOT REGISTERED 



Day 0: 
TAX 
IE DATE 



Businesses who 

file returns and pay 

obligation, if any. 



Businesses who 
do not file returns. 



iyl- 



AUDITS ' 
A percentage 
of these filers 
--;aro-audited:— ;:, 




Jfpaymeniiue 



Businesses who 

file returns, and have 

unpaid balance. 



LATE STATUS 

Subject to penalties 

and inxerest 



•90 



DETERMINATION ISSUED. 

TTX estimates tax amount due, 

penalties, interest and fees, and 

notifies taxpayer. 



I 120 



DELINQUENT STATUS 

Subject to penalties and 

interest 



DETERMINATION FINAL, 

if no payment or protest Subj ect to 

collection by BDR 



a220 



Additional Densities accrue. 



11 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



Item 2 - 02-2029 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Budget: 



Treasurer/Tax Collector 

Ordinance appropriating $998,992 from the General Fund 
Reserve to the Office of the Treasurer/Tax Collector for 
the purpose of implementing a Business Tax Penalty 
Amnesty Program during fiscal year 2002-2003, and 
placing $701,494 on reserve. 

$998,992 

Business Tax Revenue (see Comment No. 4). 

The Treasurer/Tax Collector is requesting a supplemental 
appropriation in the amount of $998,992 from the General 
Fund Reserve to implement a Business Tax Penalty 
Amnesty Program in FY 2002-2003 as described in Item 
1, File 02-1219. 

According to Mr. George Putris of the Treasurer/Tax 
Collectors Office, for the six month period from 
approximately March 1, 2003 through approximately 
August 31, 2003, the cost to implement the Business Tax 
Penalty Amnesty Program would be $998,992 as follows: 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

12 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



Description 


Requested 
Appropriation 


Appropriated and 
Unreserved Amount 


Reserved Amount 

of Total Requested 

Appropriation 


Temporary Salaries & 
Fringe Benefits 


$565,992 


$141,498 


$424,494 


Official Advertising 


30,000 


30,000 


- 


Materials and Supplies 


45,000 


18,000 


27,000 


Forms 


3.000 


3,000 


- 


Professional & 
Specialized Services 


60,000 


40,000 


20,000 


Services of Other 
Departments - DTIS 
Programming 


260,000 


30,000 


230,000 


Services of Other 
Departments - DTIS 
Telephone 


5,000 


5,000 




Services of Other 
Departments - Mail 


20,000 


20,000 




Services of Other 

Departments 

Reproduction 


10.000 


10.000 




Total Program Cost 


$998,992 


$297,498 


$701,494 



Attachment I, is a memorandum provided by Mr. Putris, 
which provides additional budgetary and programmatic 
details. 



Comments: 



1. In Attachment I, Mr. Putris identifies reserved funds 
of $648,362 instead of the Controller's recommended 
reserve of $701,454, as shown in the table above. 
According to Ms. Pamela Levin of the Controller's Office, 
the Controller continues to recommend reserved funds of 
$701,494 (see Comment No. 4). 

2. The Budget Analyst has reviewed the Controller's 
latest FY 2002-2003 expenditure projections for the 
Treasurer/Tax Collector's Office based, on salar^ and 
mandatory fringe benefit expenditures through the pay 
period ending December 20, 2002. Using fiscal year-to- 
date average pay period expenditures, to project salary 
and fringe benefit spending for the remainder of the fiscal 
year, results in a projected year-end surplus of $223,843. 
However, when basing the projection on the latest pay 
period expenditures, the Treasurer/Tax Collector's year 
end projection results in a deficit of $124,569. This 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

13 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



difference in projections is due to recent hiring of 
temporary personnel to process Property Tax payments, 
the first installment of which was due December 10, 2002. 

In Attachment II, Mr. Jay Banfield of the Treasurer/Tax 
Collector's Office explains that as a result of the increased 
spending on seasonal, temporary personnel, the 
Department will not have a surplus which can be used as 
a source of funds for this proposed supplemental 
appropriation but that the Department will end the fiscal 
year with a balanced budget. 

3. Ms. Margolis states in Attachment I that, "It is 
impossible to project the amount of revenue that will be 
generated with a new Amnesty Program. The revenue 
generated from the program will be dependent on the 
level of participation in the program from the business 
community." However, Ms. Margolis states that the total 
amount collected during the FY 1994-1995 Amnesty 
Program was $4,949,336. 

4. According to Ms. Levin, out of the total requested 
amount of $998,992, at this time, the Controller's Office is 
only able to certify $297,498 in increased business tax 
revenues that might result from the implementation of 
the Business Tax Penalty Amnesty Program, to serve as a 
funding source for the subject supplemental 
appropriation. Therefore, the Controller's Office has 
placed the balance of this request or $701,494 on reserve 
pending the submission of a report by the Treasurer/Tax 
Collector to the Controller's Office, which would provide 
information demonstrating that sufficient revenue would 
be generated by the Business Tax Penalty Amnesty 
Program, according to Ms. Levin. Mr. Putris states that 
such a report, which would be submitted to the 
Controller's Office approximately one month after the 
Program begins, would consist of 1) the number of 
responses to the program, 2) the total number of 
applicants for the Business Tax Penalty Amnesty 
Program, 3) the actual amount of Business Tax revenues 
collected to date, 4) projected total Business Tax revenue 
collections, and 5) the total amount of Business Tax 
Liability reflected in the Tax Collector's record for all 
applicants to the Business Tax Penalty Amnesty 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

14 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

Program. According to Ms. Levin, additional reports 
demonstrating appropriate business tax revenue levels 
may be required from the Treasurer/Tax Collector in 
order for the Controller to release the reserved funds. The 
Budget Analyst further recommends that the 
Treasurer/Tax Collector submit all such reports to the 
Finance Committee of the Board of Supervisors. 

5. Ms. Levin states that the Controller will submit an 
Amendment of the Whole to the Finance Committee 
designating the source of funds for the entire $998,992 as 
new Business Tax Revenues, instead of appropriating 
$998,992 from the General Fund Reserve. 

6. According to Ms. Levin, the subject $701,494 in 
reserved funds are subject to release by the Controller's 
Office but are not subject to release by the Board of 
Supervisors. The Finance Committee may wish to 
amend the proposed ordinance to require approval by the 
Board of Supervisors prior to the release of the $701,494 
in reserved funds. 

Recommendations: 1. Amend the proposed ordinance to require that the 

Treasurer/Tax Collector submit to the Finance Committee 
all reports prepared to provide information demonstrating 
that sufficient Business Tax revenue would be generated 
by the Business Tax Penalty Amnesty Program to fully 
fund the cost of the Program. 

2. Approval of the proposed ordinance, as amended, is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

15 



Attachment 




Office of the Treasurer 

& Tax Collector 

City and County of San Francisco \!^8§3IS8HttP*y 

City Hall, Room 140 \J$m5» r 

#1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102 ^<£_l3 

SUSAN LEA.L, Treasurer 

MEMORANDUM 



TO: LeanneNahn 

CC: Susan Leal 

FROM: Sbana Margolis 

DATE: January 9, 2003 

RE: Proposed Business Tax Amnesty Program Supplemental Appropriation 

Following are responses to your questions regarding the proposed Business Tax 
Penalty Amnesty Program Supplemental Appropriation Request. 

1. Program Summary \ 

The proposed Business Tax Amnesty Program would waive all penalties for 
businesses that apply and qualify for the amnesty during the 2-month amnesty period. 
Businesses must pay the principal amount of tax and all interest to qualify. The amnesty 
program would apply to all businesses that: 

(a) Failed to pay the annual business registration fee; 

(b) Failed to file a tax return, pay tax, or underreported tax; and/or 

(c) Paid registration and/or taxes late. 

Following the amnesty period, penalties for delinquent registration and tax filing will 
increase. 

2. Purpose of Supplemental Appropriation Request 

The Office of the Treasurer & Tax Collector currently does not have sufficient staff to 
administer the Tax Amnesty Program without curtailing other collection activities. The 
Office wiil require additional staff during a 6-month period to prepare and process all 
amnesty applications and payment arrangements. During the previous Amnesty Program 
during fiscal year 1994/1995, the Office processed 10,000 applications at a total cost of 
$770,952. 

3. Services to be Delivered 

The Office will engage in the following tasks and provide the following services: 
• Conduct outreach to the business community, including press releases, advertising 

in newspapers, and attempting to secure donated billboard and other types of 

advertising; 



16 



Attachment I 
Page 2 of 8 



• Preparation and mailing of amnesty application forms and materials; 

• Staffing of the phone bank to respond to amnesty applicant questions; 

• Staffing at counters for walk-in amnesty applicants; 

• Programming the business tax computer system to process the applications; 

• Programming of the on-line portal to provide online filing of amnesty 
applications; 

• Staffing to process and audit amnesty applications and payments. 

4. Anticipated Revenues Resulting from Program 

The total amount collected during the fiscal year 1994/1995 Amnesty Program was 
$4,949,336 as reported by the former Tax Collector Richard Sullivan. It is impossible to 
project the amount of revenue that will be generated with a new Amnesty Program. The 
revenue generated from the program will be dependent on the level of participation in the 
program from the business community. 

5. Description of Supplemental Appropriation Request by Line Item 



Description 


Total Cost 


Initial Cost 


Reserved 


Commentary 


Temporary 
Salaries 


5517,816 


$129,454 


S388,362 


9.5 FTE (actually 19 people for 6 
months). Detail of staff and their duties is 
outlined below. 


Mandatory 

Fringe 

Benefits 


S40,000 ... 


510,000 


530,000 


Per Controller's Office 


Official 
Advertising 


530,000 


S30,000 





Newspaper advertising of program. All 
advertising must be done in advance of 
taking applications to ensure a substantial 
number of applicants. The Office will 
attempt to obtain donated billboard and 
other advertising as per the last program. 
For details, see Schedule A attached. 


Materials and 
Supplies 


570,576 


$70,576 





Purchase of computers, desks and and 
possibly some cubicles for placement in 
temporary offices in City Hall to process 
amnesty applications. For details, see 
Schedule B attached. 


Forms 


53,000 


$3,000 





Printing of application forms. All forms 
must be created and printed prior to 
commencement. 


Internet Portal 
Programming 


535,400 


$35,400 





Online application programming. Online 
filing will substantially reduce the staffing 
cost of processing applications. The 
consultant, Ciber, was selected through an 
RFP process hired by DTPS. The RFP 
was issued in Spring 2002 and the 
contract was sinned in Summer 2002. 



17 



Attachment I 
Page 3 of 8 











Ciber's costs are estimated at S25,000. 
DTIS will also incur programming costs 
estimated at $5,000. All portal costs must 
be incurred prior to the commencement of 
the project and are not scalable. For 
details, see Schedule C attached. 


DTIS 

programming 


$260,000 


530,000 


$230,000 


Work order funds to DTIS. This cost is an 
estimate based on DTIS' programming 
costs to run the prior amnesty program. 
The initial cost assumes manual data entry 
of application forms unless a substantial 
volume requires automation. 


Telephone 
Service 


S8,20Q 


58,200 





Work order funds to DTIS. Separate 
phone lines for program through DTIS. A 
high volume of calls is expected that will 
overwhelm the current phone system. For 
details, see Schedule D attached. 


Mail Service 


524,000 


524,000 





Work order funds to Reproduction. Time 
& Postage - 3 oz./24,000. Mailing of 
notice to known delinquent taxpayers 
must take place prior to start of program. 


Reproduction 
Service 


510,000 


$10,000 





Work order funds to Reproduction. Print 
and fold 24,000 letters 


Total 


5998,992 


5350,630 


$648,362 





6. Reason for Placing Some Money on Reserve 

The estimated cost of the program is 5997,316 as outlined above. Because it is 
unknown how much money the program will actually bring in, the Office of the 
Treasurer & Tax Collector has estimated the minimum amount of money it will take to 
get the program up and running if few businesses apply for the amnesty. These initial 
costs are outlined above and include advertising, phone lines, printing and mailing forms 
and applications, computer and on-line portal programming and 25 percent of the total 
staff time. 

A limited number of staff will begin by focusing on identifying delinquent taxpayers 
and preparing notices, forms and applications. Additional staff members will be utilized 
when the amnesty- filing period begins. These employees will staff the phone bank and 
counters to assist businesses that apply for amnesty. If there is a large response to the 
program, the Office will employ all estimated temporary positions to process such 
applications. Additional programming costs will be incurred to provide for automated 
processing of large quantities of applications. 



7. Detail of Temporary Positions 

Cost FTE Annual 

4222 Sr. Auditor 37,284 .5 74,568 

4220 Auditor 128,856 2 64,428 

4308 Collections Officer 115,492 2 57,746 



Attachment 1 
Page 4 of 8 



1632 


Sr. Account Clerk 


103,480 


2 


51,740 


1630 


Account Clerk 


89,388 


2 


44,694 


1424 


Clerk Typist 


43,316 


1 


43,316 




Total 


S517,816 


9.5 





The clerk/typist and account clerk positions will be responsible for manually entering 
in the application data into the Business Tax System. It is assumed that one clerk-typist 
can handle a small volume of applications. However, if a large volume of applications is 
received, it will be necessary to have DTIS program the system to automate the data entry 
as one typist will not be able to handle a large volume. If the system is reprogrammed, 
one clerk-typist position will still be necessary to scan the applications into the system, 
handle exceptions and file documents. 



19 



Attachment I 

SCHEDULE A p age 5 of 8 

BUSINESS TAX AMNESTY AD COST 

For a 3.75" wide x 4" deep paragraph 

NEWSPAPER COST (ONE DAY) NO. OF DAYS TOTAL COST 

SAN FRANCISCO INDEPENDENT S573.12 4 52,292.48 

Publishes on Saturdays, Tuesdays and Thursdays only 

SAN FRANCISCO EXAMINER' $1,195.20 5 55,976.00 

Publishes Monday thru Friday 

SAN FRANCISCO CHRONICLE 

Publishes everyday 

SUNDAY: . $4,400.00 2 $8,800.00 

WEEKDAY: S4.264.00 3 $12,792.00 

TOTAL COST $29,860.48 



20 



Attachment I 
Page 6 of 8 



SCHEDULE B 



Breakdown of estimated materials and supplies: 

18 computers (PC and monitors) SI 500.00 ea. = $27,000. 
18 Software licenses: 

MS Office Professional @ S500 ea. (database) 9,000. 

Rumba Office software for system access @ S300 ea. 5,400. 

4 Printers and Toner/paper supplies 5,000. 

CITY HALL (for an identified pre-wired location) 

Desks 18 @ SI 232.00 Ea. 522,176. Rounded 

(Any monies left will be applied to cubicle partition 
Set up costs). 



Purchase local Area network hardware switch 2,000. 

TOTAL: S 70,576. 



IMPORTANT TO NOTE THAT A PRE-WIRED CITY HALL ROOM THAT CAN 
HANDLE 18 COMPUTERS HAS AS OF THIS DATE NOT BEEN IDENTIFIED. 
COSTS MAY INCREASE IF WE GO OUTSIDE CITY HALL. 



21 



Attachment I 
Page 7 of 8 



SCHEDULE C 

BUSINESS TAX AMNESTY ONLINE REGISTRATION 

Overview: 

The Amnesty Registration application would allow businesses (delinquent registrants only) to register 
online for the Business Registration Certificate and to calculate fees associated with late 
registration/filing. 

General description of the application that we envision: 

■ Businesses will submit the registration information online and then print and mail a signature slip 
(which will satisfy the requirement for an original signature). The Tax Amnesty Registration 
application will calculate registration and payroll tax fees/penalties based on the business start 
date and the annual payroll cost. 

■ Payment by check will be mailed along with the signature slip or payment will be made online by 
credit card or electronic check (convenience fees may apply). 

■ The registration information will be uploaded to BTS upon receipt of the signature slip and 
payment (if not already paid online). 

Cost: 
Ciber: 

Project Management 40 hours 

Technical Architect 20 hours 

Application Developers/QA Testing 1 00 hours 

Content Developer/Graphic Artist 20 hours 

Technical Writer 20 hours 

Ciber Cost: 200 hours @ 5125/hour = $25,000 

DT1S: approx. 100 hours BTS programming at S104/hour = 510,400 

TOTAL COST: S35,400 



22 



Attachment 1 
Page 8 of 8 



SCHEDULE D 



BREAKDOWN for a telephone system only at an*identified, pre-wired, 

location in City Hall for 18 units: 

Installation Costs: 18-line ACD group: $7,700. (rounded) 
6408 Set for 18 units at S427 set = 57,686.00 

Installation S 300. 

ACD programming S 200. 

TOTAL: S8,200.00 



*IMPORTANT TO NOTE THAT A PRE-WIRED CITY HALL ROOM THAT 
CAN HANDLE 18 COMPUTERS HAS AS OF THIS DATE NOT BEEN 
IDENTIFIED. COSTS MAY INCREASE IF WE GO OUTSIDE CITY HALL. 



23 



Attachment 



Office of the Treasurer 

& Tax Collector 

City and County of San Francisco 

City Hall , Room 140 

#1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102 




SUSAN LEAL, Treasurer 

JAY BANFTELD, Chief Assistant Treasurer 

Phone:(415)554-4478 



January 8, 2003 

Ms. Leanne Nhan 
Budget Analyst's Office 
1390 Market Street, Suite 1025 
San Francisco, CA 94102 

Dear Ms. Nhan, 

You have indicated that the latest expenditure projection from the Controller's Office 
shows a deficit of $124, 569 and a surplus of $223,843 in salary and fringe benefits, 
depending upon the methodology used. 

These projections, by definition, do not account for the office's staffing plan for the 
remainder of the fiscal year. As in prior years, the office will hire seasonal personnel for 
the processing of business tax statements (deadline of February 28, 2003) and property 
tax statements (deadline of April 10, 2003). The Office of the Treasurer & Tax Collector 
will also hire positions authorized by the Board of Supervisors to administer the Police 
Emergency Alarm ordinance, as well as recently vacated collection and auditing positions 
that generate millions of dollars in tax revenue. 

As a result, the Office of the Treasurer & Tax Collector will end the year with neither a 
deficit nor a surplus in salary and fringe benefits. Our staffing plan will result in salary 
and fringe benefit expenditures equal to our budgeted amount. 

Please feel free to contact me if you would like to discuss this in more detail. 



Sincerely, 
Jay Banfield 



24 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



Item 3 - File 02-1599 

Department: 

Item: 



Location: 
Purpose of Lease: 



Port 



Resolution approving a sublease between Ferry Building 
Associates, LLC, as Sublandlord, and San Francisco Port 
Commission, as Subtenant, for the Port Commission 
Hearing Room and ancillary premises, located in the 
Ferry Building. 

Second floor, Ferry Building, The Embarcadero. 

To provide public meeting space for the Port Commission, 
including ancillary conference and storage areas. Under 
the proposed sublease, the Port would have the exclusive 
right to use the Port Commission Hearing Room and 
adjacent space for its twice-monthly regular meetings, 
and the exclusive right to use the Port Commission 
Hearing Room and adjacent space for other Port meetings 
upon 45 days prior notice to Ferry Building Associates, 
LLC. Ferry Building Associates, LLC may use the Port 
Commission Hearing Room and adjacent space when it is 
not in use by the Port Commission, subject to the Port's 
right of first refusal. The ancillary conference and storage 
areas are for the Port's exclusive use. 

The Port owns the Ferry Building. However, in order to 
rehabilitate the Ferry Building as a mixed use project, the 
Port entered into a Lease Disposition and Development 
Agreement with Ferry Building Associates, LLC on 
January 24, 2000, as approved by the Board of 
Supervisors on December 20, 1999 (Resolution No. 1140- 
99). In accordance with (a) the Lease Disposition and 
Development Agreement, (b) a Ground Lease dated April 
10, 2001, and (c) a Master Tenant Sublease dated 
December 31, 2001, between the Port and Ferry Building 
Associates, LLC, the Port Commission is authorized to 
conduct its regularly scheduled meetings and to maintain 
ancillary conference and storage space at the Ferry 
Building. 

Under the proposed sublease, the Port is requesting (a) 
use of the Port Commission Hearing Room consisting of 
2,310 square feet, (b) use of adjacent space consisting of 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

25 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



Sublessor: 
Sublessee: 



990 square feet, and (c) exclusive use of 600 square feet 
for the ancillary conference and storage areas, for the 
remainder of the Lease Disposition and Development 
Agreement and the Ground Lease. In April of 2067, the 
Ferry Building returns to the Port's full control when the 
Lease Disposition and Development Agreement and the 
Ground Lease with Ferry Building Associates, LLC 
expires. 

Ferry Building Associates, LLC. 

City and County of San Francisco, acting through the Port 
Commission. 



No. of Sq. Ft. and 
Monthly Rent 
Payable by the 
Port to Ferry 
Building Associates: 



2,310 square feet for the Port Commission Hearing Room, 
990 square feet for adjacent space, and 600 square feet for 
the ancillary conference and storage areas, for a total of 
3,900 square feet. 



Annual Costs 
Payable by the Port 
to Ferry Building 
Associates, LLC: 



The Port would not pay rent or operating costs related to 
the Port Commission Hearing Room and adjacent space. 
However, the Port is required to pay an estimated cost of 
between $8,022 and $9,222 per year for its share of 
building operating costs related to the ancillary 
conference and storage areas, and for utility, janitorial, 
and security services provided after hours and at special 
events, as stated in Attachment I, provided by Ms. Kari 
Kilstrom of the Port. 



Term of Lease: 



The proposed lease commences on the date that Ferry 
Building Associates, LLC delivers the premises to the 
Port, which is expected to occur in March of 2003. The 
proposed lease terminates upon expiration of the Lease 
Disposition and Development Agreement with Ferry 
Building Associates, LLC in April of 2067, when the Ferry 
Building returns to the Port's full control. The Port, at its 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

Z6 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

sole discretion, can terminate the proposed sublease at 
any time without penalty. 

Utilities and Janitorial 

Services: To be provided by Ferry Building Associates, LLC except 

during the hours after 10:00 p.m. and for special events. 
The annual costs of utilities and janitorial services after 
business hours and during special events are estimated to 
be between $2,500 and $3,700, as reported by the Port in 
Attachment I. 

Tenant Improvements: Under the proposed lease, Ferry Building Associates, LLC 

is required to construct improvements to the Port 
Commission Hearing Room and adjacent space at a total 
estimated cost of $1,315,854, as detailed in Attachment II 
provided by the Port. Of this amount, Ferry Building 
Associates, LLC is required to pay 31.78 percent of such 
costs, or an estimated $418,204, and the Port is required 
to pay 68.22 percent of such costs, or an estimated 
balance of $897,650. 

Comments: 1. Ms. Kilstrom advises that the Port currently conducts 

Port Commission hearings in conference room facilities 
located at Pier 1. Ms. Kilstrom advises that moving Port 
Commission meetings back to the Ferry Building will 
release the Pier 1 conference room facilities for full-time 
use by Port staff. 

2. Attachment III is a memorandum from Ms. Kilstrom 
explaining why Ferry Building Associates, LLC is 
required to pay 31.78 percent of the tenant improvements 
and why the Port is required to pay 68.22 percent of the 
such improvements. According to Ms. Kilstrom, "The Port 
is responsible for improvements related to using the Room 
and ancillary space for public meeting room purposes, 
including acoustic treatments, telecommunications, 
audio/visual, data and computer cabling facilities and 
equipment and talking signs. The cost of $897,650 
includes design, construction and furnishings." 

3. The Budget Analyst notes that the total cost of 
$1,315,854 for the proposed tenant improvements to the 
3,900 square feet space for the Port Commission Hearing 
Room and adjacent space represents approximately 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

27 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

$337.40 per square foot. Attachment IV, provided by Ms. 
Kilstrom, explains (a) why the proposed tenant 
improvements would cost $897,650 for the Port's share, 
(b) how the scope and cost of the proposed tenant 
improvements were determined and by whom, and (c) how 
each of the subcontractors who will construct the tenant 
improvements were selected. Ms. Kilstrom reports, in 
relation to the $897,650 cost to the Port, that excluding 
(a) specialized construction items in the amount of 
$384,118, or approximately $98.49 per square foot, (b) soft 
costs (i.e. design related fees including the development 
management fee) in the amount of $151,183, (c) 
furnishings in the amount of $174,375, and (d) a 
contingency amount of $42,745, the base construction 
costs for the 3,900 square foot space are $145,259, or 
approximately $37.25 per square foot. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

28 




Attachment I 



SAN FRANCISCO 



To: Budget Analyst 

From: Kari Kilstrom 

Project Manager 

Date: November 12, 2002 

Subject: Rent and Operating Costs 

The Port would not pay rent or operating costs related to the Port 
Commission Hearing Room and adjacent space. However, the Port is 
required to pay: 

• 50 percent of its share of building operating costs for insurance, taxes, and 
common area maintenance attributable to the 600 square feet of ancillary 
conference and storage space. The Port's share of such expenses is 0.41 
percent of the total costs for Ferry Building office users, or an estimated 
$5,522 per year or approximately $460 per month. 

• Utility, janitorial, security, and other service costs provided to the Port for 
special events, at an estimated annual cost of between $2,400 and $3,600. 

• Utility, janitorial, security, and other service costs provided to the Port at 
the ancillary conference and storage areas after normal business hours, at 
an estimated annual cost of $100, which is a nominal estimate for lighting 
in the executive conference room since such meetings typically extend 
beyond normal business hours. 

• Consistent with standard lease provisions, the Port is responsible for costs 
of security after 10:00 p.m. at regularly scheduled Port Commission 
meetings and other costs incurred in connection with services and above- 
standard utilities provided to the Port which are not provided to other 
Ferry Building tenants. No such costs are anticipated. 

The cumulative estimated cost of these additional payments is between 
$2,500 and $3,700 per year. When added to the estimated building operating 
cost of $5,522 per year, total costs to the Port would amount to between 
$8,022 and $9,222 annually. 



imahmuj 



29 



t l . l .l.Ulik 



JAN-08-2003 13=5: 



IF PORT-PLANNING DI 1 




Attachment 1 1 
Page 1 of 2 



PORT£i_ 

SAN FRANCISCO 



APPROVED COSTS 



Tenant Improvements to be Paid bv Ferry Building Associates, LLC 



Original Improvements 

Finish Carpentry 

Historic Window Repair 

Door Assemblies 

Drywall, paint and wall panels 

Acoustic ceiling and fire protection 

Carpet 

Window coverings 

HVAC 

Electrical systems 

Talking signs 

Security system 

Contractor fee, tax, general expenses 

Design fees 



Modifications to Original Improvements 

Interior finish carpentry 

Construction of moveable dais 

Sealant, caulking, door assemblies, drywall, painting 



Subtotal to be Paid by Ferry Building Associates, LLC 



$ 22,550 

24,000 

16,232 

49,025 

9,105 

12,240 

7,995 

31,815 

100,785 

39,037 

13,942 

36,675 

24.599 

$388,000 



$ 1,501 

24,995 

3.708 

$ 30,204 

$418,204 



II. Tenant Improvements to be Paid bv the Port 

A. Fundamental Construction Items 

General requirements 

Carpentry, metal construction, flooring 

Appliances 

Plumbing 

Fire protection 

Heating, ventilation, air conditioning 



$ 55,884 

43,473 

513 

17,681 

1,221 

26,487 

$145,259 



PORT OF SAN FRANCISCO 



T£L a 15 J74 0JOO 



rrv «15P74 056? 



January' 8, 20QJ 



ADDRESS PiBr 1 



JAN-08-2003 13:53 



SF PORT-PLANNING DIU. 



Attachment 1 1 
Page 2 of 2 



B. Specialized Construction Items 

Technical improvements 

Acoustics (fabric panels), historic wood window surrounds 
Lighting, AV display/housing, and related electrical 
Talking signs 

C. Soft Costs 

SMWM design fees, January 15, 2002 Proposal 

Architectural/Furniture - Tom Eliot Fisch 
Audio-visual/Acoustical - Charles Salter &. Associates 
Lighting Design - Horton Lees 



$183,424 
93,017 
82,677 
25,000 

$384,118 



S 73,625 

26,780 

8,740 

$109,145 



PLANT design fees, February 12, 2002 Proposal 

Plumbing/Fire Protection/HVAC - M.E.P. Systems 
Electrical - Electrical Systems 



S 7,803 

12.976 

$ 20,779 



Development Management Fee (3% of A-C above) 

Payable to Ferry Building Associates, LLC for 
coordination and direction of the design, construction, 
and installation of the technical improvements and the 
modifications to the original improvements 

Soft Costs Subtotal: 



D. Furnishings 



Movable dias 

Seating, subject to separate use agreement to be agreed 

upon between the Port and FBA 

Motorized window coverings 



E. Contingency (5% of A-E above) 
Subtotal to be Paid by the Port 
TOTAL: 



$ 21,259 
$151,183 

5 40,749 

125,000 

8,596 

$174,345 

$ 42,745 

$897,650 

$1,315,854 



31 



January $. 2003 

TOTAL P. 03 



DEC-31-2002 16: 1' 



BF PORT-PLANNING DIU. 




Attachment III 



PORT^ 

SAN FRANCISCO 



To: Budget Analyst 

From: Kari Kilstrom 

Project Manager 

Date: December 3, 2002 

Subject: Improvements to Port Commission Hearing Room 



The "Port Sublease Term Sheet" referenced in the Lease Disposition and 
Development Agreement between the Port and FBI sets forth the type of 
improvements required for the Commission Room and Ancillary Spaces to be 
funded by FBI and the Port. The amount paid by FBI and the Port, 
respectively, is simply a function of the scope of improvements to be funded 
by each party, rather than a negotiated percentage of total cost. 

FBI is required to undertake improvements to the Commission Room 
appropriate for a public, honorific space and improvements to the Ancillary 
Spaces equivalent to "building standard" office improvements. The cost of 
$418,204 includes design and construction, including features such as 
acoustical treatments, installation of historic windows, talking signs and a 
mobile dais. 

The Port is responsible for improvements related to using the Room and 
ancillary space for public meeting room purposes, including acoustic 
treatments, telecommunications, audio/visual, data and computer cabling 
facilities and equipment and talking signs. The cost of $897,650 includes 
design, construction, and furnishings. 



TEL .115 ??■» 0*00 



ttv 415 9.14 0567 



JhN-07-2003 15= 12 



SF PQRT-PLHflNlNG Dl'J. 




Attachment IV 
Page 1 of 4 



PORT£i_ 

SAN FRANCISCO 



This attachment provides additional information regarding the cost of tenant 
improvements at the Port Commission Hearing Room in the Ferry Building. 

a) Explain why the tenant improvements associated with the Port Commission 
Hearing Room within the historic Ferry Building are expensive. 

The construction costs for the Port Commission Hearing Room include expense items 
that are indicative of restoration and refurbishment of a historic building consistent with 
Secretary of the Interior Standards administered by the State Office of Historic 
Preservation ("SHPO") and National Park Service ("NPS"), and for development of 
public meeting rooms within historic civic buildings. Such cost items, which include 
talking signs, rehabilitation and reuse of historic elements such as windows, specialized 
acoustic treatments, audio/visual equipment and related wiring, and a dais and other 
furnishings suited to a public meeting facility, would not be incurred in new office space 
construction. 

Additional factors that contribute to the cost of the Hearing Room include: 

• Lack of building services such as water nearby contribute to higher than usual 
plumbing costs; 

• The need to acoustically separate this room from adjacent Class-A office space; 

• The building's mechanical system was not designed to accommodate a relatively 
small space that could stay open well after normal business hours, requiring some 
independent mechanical features to be incorporated to serve the conference room and 
main meeting room areas. 

In order to examine tenant improvement costs related to creating a public meeting space 
(as compared to, say, office space improvements) the Port's budget of $897,650 should 
be isolated from the developer expenditures. 

Excluding (a) specialized construction items (described below) in the amount of 
S384.118, (b) soft costs (i.e. design related fees including the development management 
fee) in the amount of 5151,183, (c) furnishings in the amount of 5174,375, and (d) a 
contingency amount of $4-2,745. the fundamental construction costs for the 3,900 s n uare 
foot space are $145,259 or $37/sf. 

In order for the Port to properly conduct its commission meetings and other events in the 
Hearing Room, specialized construction items must be installed that are specifically 
related to creating a functional, accessible public hearing space. These items include; 
technical improvements (i.e. telecommunications, audio/visual and specialty presentation 
equipment and data and computer cabling facilities and equipment); acoustic treatments; 



THL 41S9?*(M0O 



TTV 4IU 274 0587 



JAN-07-2003 15=12 SF PORT-PLPiNN I NG DIU. 

Attachment IV 



Page 2 of 4 





$145,259 


$ 37/sf 


$183,424 


$384,118 


$ 98/sf 


S 93,017 







lighting, audio/visual display, housing and related electrical systems; and talking signs. 
These items total $384,118 or $98/sf, as summarized below. 



Fundamental Construction Items 

Specialized Construction Items 
Technical Improvements 
Acoustics and historic 

windows 
Lighting, AV display/housing 

and related electrical $ 82,677 

Talking signs $ 25,000 

Soft Costs (i.e. Design and management) $151,183 $ 39/sf 

Furnishings $174,345 

Movable dais $ 40,749 

Seating $125,000 

Window coverings $ 8,596 

Contingency $ 42.745 

TOTAL $897,650 



The specialized requirements that are unique to public meeting space improvements 
result in higher costs per square foot than may be typical of new office space 
construction. Generally, tenant improvements are spread over a much larger area than 
the 3,900 square feet space that has been isolated in this analysis. Any comparison of 
costs per foot is therefore somewhat skewed, given an unusually low denominator over 
which the costs are spread. 

b) Describe how the scope and cost of tenant improvements were determined and 
by whom. 

The design team headed by Tom Eliot Fisch prepared the construction documents for the 
Port Commission Hearing Room and Plant Construction, the contractor, provided the 
costs for tenant improvements. The Port Commission approved the scope and cost of 
tenant improvements on May 28, 2002 with the approval of the Sublease between Ferry 
Building Associates and the Port. As of December 2002, the Port estimates a cost of 
$844,330 for the Hearing Room improvements, well within the authorized budget of 
$897,650. 

Furniture pricing is based upon manufacturer's listed prices and includes a 40% discount 
assuming the Port qualifies for California Communities discount for City of San 



34 



JAN-07-2003 15=13 SF PORT-PLANNING DIU. 

Attachment IV 
Page 3 of 4 



Francisco agencies, and includes tax, freight and installation. The scope and budget were 
minimized by eliminating conference chairs which will be re-used from the Port's 
offices, using a simple conference table rather than one which incorporates audio-visual 
or telephone data capabilities, and by only using manufacturers that participate in the 
California Communities discounting program. 

In general, the cost of the furniture is the same from any dealer participating in the 
discounting program, which provides a deep discount. The remaining price variable is 
the delivery and/or installation fee. Several of the furniture pieces selected for the 
hearing room are manufactured only by Steelcase. The policy among dealers that 
represent Steelcase is to avoid bidding against one another for the same product, thereby 
limiting the field of furniture dealers to (a) the most proximate Steelcase dealer 
participating in the discounting program; and (b) other dealers participating in the 
discounting program that do not normally deal with Steelcase but would make 
arrangements with another dealer to obtain the product at the discount price and within 
reasonable proximity to provide competitive delivery rates. At least two furniture dealers 
produced pricing, between $85,746 and $79,607 (before tax). The dealer with the lowest 
bid was selected. 

b) Describe how the subcontractors were selected. 

The Port Commission Hearing Room scope based on a preliminary design was originally 
part of the overall Ferry Building scope of construction. Ferry Building Associates, via 
Plant Construction, initiated a publicly advertised bid process for most sub-contractors 
for the building. During the contracting process, the developer implemented an Equal 
Opportunity Program contained in the Development Agreement in furtherance of 
covenants not to discriminate and to afford opportunities for minority-owned enterprises, 
women-owned enterprises and economically disadvantaged local businesses to participate 
in the architecture, design, engineering and development of the improvements. 
Subsequently, the Port Commission approved the final design and budget for the Hearing 
Room. The original building subcontractors remained part of the team building out the 
Hearing Room space for two major reasons: The subcontractors were already mobilized 
on site, saving the Port mobilization and demobilization costs for the Hearing Room; and 
deleting the Hearing Room scope from the original subcontracts would not result in 
receiving back most of the value of the preliminary design. The contract award price for 
each item of work includes overhead, mobilization and profit. If work is deleted from the 
contract, the "credit" value excludes such fees and does not yield a dollar-for-dollar 
return. The Ferry Building contract includes favorable unit prices for various 
subcontracted items of work reflecting the economies of scale associated with a large 
construction project, which are applied to the relatively small hearing room space to the 
Port's benefit. In addition, the subcontracts for plumbing, sprinkler, mechanical and 
electrical are all "design-build" which streamline and economize the overall process and 
cost for final design and construction. 

An Audio-Visual subcontractor was added to the original team to procure and install the 
Technical Improvements and related audio-visual systems. The Port worked with 



35 



Attachment IV 
Page 4 of 4 



Charles M. Salter Associates, consultants in acoustics and audio-visual design for over 25 
years, to define the technical requirements to achieve the public meeting function of the 
hearing room and prepare documentation to procure bids from specialty contractors. The 
process included a value engineering effort just prior to requesting bids, which further 
refined and minimized the scope and estimated cost of the technical improvements. Once 
contract documents were prepared based on the value-engineered audio-visual system for 
the room, Salter recommended five A/V vendors in the Bay Area qualified to deliver the 
scope of work. As part of the bid process, the general contractor pursued the Minority 
and Women Owned business contracting goals for the project of 22% and 8%, 
respectively. The bid amounts were as follows: 

Spimtar $207,500 

Andersen Audiovisual $188,354 

CompView $169,105 

MCS1 $168,277 

Integrated Media Systems $164,734 

After all of the subcontractors were interviewed, it was felt that MCSI was best qualified, 
and the eventual value of their contract was reduced to the equivalent of the lowest bid. 
A certified Minority Business Enterprise performed the wire-pull scope of work as part of 
the MCSI team. 

The Talking Signs are a requirement of the Mayors Office on Disability to augment the 
accessibility to public spaces for the visually impaired. At this time, there is only one 
manufacturer nationally and one local authorized installer for the required equipment. 



36 



tos i-cv^oram 1 ,1 • n .1 cov ,-n ="5'?.in='.i" 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

Item 4 - Files 02-1876 



Note: This item was continued by the Finance Committee at its meeting of 
December 18, 2002. 



Department: 
Item: 

Location: 



Purpose of Lease 
Extension: 



Lessor: 

Lessee: 

Term of Lease 
Extension: 

Additional 
Right of Renewal: 



Department of Administrative Services, Real Estate Division 

Resolution authorizing the exercise of an extension option 
at 875 Stevenson Street for various City departments. 

875 Stevenson Street: a portion of the first floor, all of the 
second, third, fourth and fifth floors, 25 parking spaces, and 
basement storage space. 



Office space in the amount of 158,442 square feet, as detailed 
in Attachment I to this report, provided by the Real Estate 
Division, for the following City Departments and functions: 
Assessor - Payroll; Controller - Payroll and Personnel; Public 
Administration and Public Guardian -County Veterans 
Service; Department of Public Works (DPW) - Payroll, 
Accounting, Streets and Mapping; MUNI - Security, MIS and 
Payroll; Reproduction and Mail Services; and, PUC Utilities 
Engineering Bureau, 25 parking spaces and 3,000 square 
feet of basement storage for the Law Library. 

Western Mart Co., LP. (Western Mart) 

City and County of San Francisco through the Real Estate 
Division 

Five years, commencing on December 1, 2002 and 
terminating on November 30, 2007 (see Comment No. 3). 

On November 30, 2007, the City would have an option to 
extend the lease for (a) one six month period, and (b) two one 
year periods. 



Monthly and Annual 
Rent Payable by 
the City to 
Western Mart: 



The monthly rent payable by the City to Western Mart for 
158,442 square feet of office space, 25 parking spaces and 
3,000 square feet of basement storage space at 875 
Stevenson Street, would be $290,477 or $3,485,724 annually 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

37 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



($22.00 per square foot or approximately $1.83 per square 
foot per month based on the 158,442 square feet of office 
space). This proposed rent of $3,485,724 annually would 
remain the same during the entire five year lease extension. 
The existing rent is $218,587 monthly or $2,623,044 
annually ($16.55 per square foot). Therefore, the proposed 
lease extension represents an increase of $862,680 annually 
($71,890 monthly) or 32.9 percent over the existing rent. 



Utilities and 

Janitorial 

Services: 



Comments: 



The City would continue to pay for the costs of electricity, 
janitorial services, and security guards. According to Mr. 
Larry Jacobson of the Real Estate Department, the City 
would pay approximately $1,050,000 annually for electricity, 
DPW custodians, and Building and Grounds Patrol Officers. 
Attachment II to this report, provided by Mr. Jacobson, 
shows the annual budget for these services. 

1. According to Mr. Jacobson, all of the existing City 
department tenants would remain at 875 Stevenson Street, 
with the exception of the PUC Utilities Engineering Bureau 
which will relocate its offices from the third floor (32,000 
square feet) at 875 Stevenson Street to 1155 Market Street 
before March 1, 2003. The Budget Analyst previously 
reported to the Finance Committee for a supplemental 
appropriation ordinance (File 02-1892) approved by the 
Board of Supervisors on November 25, 2002, that the 
Department of Aging and Adult Services (DAAS) will move 
into the third floor at 875 Stevenson Street by August of 
2003. 1 



2. According to Ms. Monique Zmuda of the Controller's 
Office, City department tenants do not have the funds 
budgeted for the increased monthly rental costs during FY 
2002-2003 from December 1, 2002 through June 30, 2003 of 
$71,890 per month lor seven months, or a total of $503,230, 
in their approved FY 2002-2003 budgets. According to Mr. 
Ben Rosenfield of the Mayor's Budget Office, the Mayor's 



1 The PUC will pay for the relocation and improvement expenses of the DAAS, which will cost 
$298,000 from funds appropriated in the supplemental appropriation (File 02-1892), and for four of 
the five months (March of 2002 through January of 2003) at the existing rent rate ($759,942 
annually, $63,328.50 monthly), which will cost the PUC $253,314 from funds approved in their FY 
2002-2003 budget. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

38 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

Office will not support a supplemental appropriation for such 
increased rental costs and will work with the applicable City 
departments to absorb such increased costs in their FY 2002- 
2003 budgets. 

3. Mr. Jacobson advises that the Real Estate Department is 
bringing the subject resolution to the Board of Supervisors, 
after the existing lease expired on November 30, 2002, 
because the City and Western Mart only reached an 
agreement on November 21, 2002. Mr. Jacobson states that 
the City is not renting the space at 875 Stevenson Street on 
a month to month basis but is rather waiting for retroactive 
approval to reimburse Western Mart for December's rent 
payment under the terms of the proposed five year lease 
extension. The proposed resolution should therefore be 
amended to provide for retroactivity. 

4. As explained in Attachment II to this report, Mr. 
Jacobson states that an independent appraiser, David 
Bohegian, determined the prevailing market rental rate at 
875 Stevenson Street to be approximately $1.83 per square 
foot per month ($22.00 per square foot per year), or 
$3,485,724 annually for the 158,448 square feet of office 
space which the City is leasing. Mr. Jacobson states that 
the Real Estate Department agrees that Mr. Bohegian's 
independent appraisal of the market rental rate of the 
property represents fair market value. 

Recommendations: 1) In accordance with Comment No. 3, amend the subject 
resolution to provide for retroactivity. 

2) Approve the subject resolution, as amended. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

39 



875 STEVENSON RENT ALLOCATION 



Attachment I 





BOMA 


Rent Per 


Monthly Annual 


Deportment 


Area 


Sq.Fi 


Rent Rent 












Reproduction (1st) 


9,396 


1 .8333 


17,226 


206,708 


DTIS (1st. 5th) 


35,158 


1 .8333 


64,455 


773,462 


Assessor/Recorder (1st) 


9,934 


1.8333 


18,212 


218.544 


Lobby 











Public Administrator (2nd) 


1,030 


1.8333 


1.888 


22,660 


Muni (formerly Pub. Admin. Space) 


12.248 


1.8333 


22,454 


269,451 


Muni (2nd) 


8,873 


1.8333 


16,267 


195,202 


Controller - PPSD (2nd & 3rd) 


13,230 


1.8333 


24,255 


291.055 


PUC (3rd) 


33,145 


1.8333 


60,767 


729,199 


DPW (4th) 33,700 


1.8333 


61,782 


741.387 


Cafe (4th) 










Storage (1st) 


1,727 


1.8333 


3,166 


37,993 


(Storage: Treasurer 50%, Human Ser. 30% 








Retirement 10%, Controller 5% 








Purchaser 5%) 














Totals 158,442 




$290,472 


53,485,681 



stevebud 



Attachment II 

Page 1 of Z 




ATTACHMENT #1 RE: File 02-1876 

MEMORANDUM 
DATE: December 4, 2002 



TO: Harvey Rose, Budget Analyst 



FROM: Larry Jacobson — A / 

Senior Real Property Officer 



The following items are in response to your office's questions: 



The reason that this resolution is being submitted to the Board of Supervisors 
after December 1, 2002 is that negotiations began in June 2002, and were not 
completed until November 21, 2002; too late to meet the December 1, 2002 
deadline. 



2. Paragraph 9 of the First Amendment of the lease describes the process for 

establishing an extension option rental rate; this process was used by the Mart 
(Landlord) and the City (Tenant). First it states "At the commencement of each 
Extended Term, the Rent shall be adjusted to equal ninety- five percent (95%) of 

the Prevailing Market Rate ". The Amendment also includes a process for 

each party to hire an appraiser. If the appraisers' value is more than 10% apart, a 
third appraiser will be hired. The third appraiser will then average his value with 
the closer of the two previous appraisals. "This third appraisal will then be 
averaged with the closer of the two previous appraisals and the result shall be the 
Prevailing Market Rate". 

The 875 Stevenson Street Landlord's appraiser (Rhoades) recommended a $26.50 
per square foot rental rate, while tbe City's appraiser (Carneghi) set forth a rate of 
$12.38 per square foot. The third appraiser (Bohegian) was hired by the City and 
the Landlord, and established a rate of $22.00 per square foot. 

If the City and the Landlord strictly followed the mechanism outlined in the lease, 
the Prevailing Market Rate would have been midpoint between the Rhodes 
appraisal ($26.50) and the Bohegian appraisal ($22.00) specifically $24.25 per 
square foot. The City and the Landlord, however, agreed to accept the Bohegian 
rental rate of $22.00, which is less than 95% of the $24.25 ($23.03) . It was 
advantageous to the City to accept $22.00 rather than 95% of $24.25. 

LI/875 Stevenson/harveyrose 875Stevns2 a , 



Attachment! I 
Page 2 of 2 



According to the terms of the lease, the City is obligated to lease the entire 
158,442 square foot premises. The third floor of the subject building is presently 
occupied by the Public Utilities Commission staff. The staff will be moved to 
1155 Market Street in the spring of 2003. The furniture, telephones and servers 
will remain in the leased space to be used by the next tenant: Department of 
Aging and Adult Services will move in as soon as is practical. Any large office 
move normally takes 60 to 90 days to have one tenant move out and a new tenant 
move in. The Real Estate Division anticipates that the time available will 
facilitate a smooth transition from PUC to DAAS. 



The cost of security, janitorial / maintenance and electricity during the current 
fiscal year is as follows: 

Security $264,000 

DPW/Maint. 701,000 

Electricity 85,000 

$1,050,000 



Larry Jacobson 12/4/02 



LJ/875 Stevenson/harveyrose 875Stevns2 4 2 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

Item 5 - File 02-1966 

Note: This item was continued by the Finance Committee at its meeting of 
December 18, 2002. 

Department: Fire Department 

Item: Hearing to consider release of reserved funds, Fire 

Department's FY 2002-2003 budget, in the amount of 
$322,277 for salaries of five existing training officers 
(three H-39 Training Captains and two H-43 EMS 
Training Section Chiefs). 

Amount: $322,277 

Source of Funds: Reserved funds in the Fire Department's FY 2002-2003 

budget, as finally approved by the Board of Supervisors. 

Description: During its consideration of the Fire Department's budget 

for FY 2002-2003, the Board of Supervisors reserved six 
months of salary costs, in the amount of $322,277, for the 
following five filled positions: 



Position 


Salary 


1 (0.5 FTE) H-39 In-Service Training Officer 

1 (0.5 FTE) H-39 H-3 Academy Officer 

1 (0.5 FTE) H-39 Firefighter Recruit Training Officer 

1 (0.5 FTE) H-43 EMS In-Service Training Section Chief 

1 (0.5 FTE) H-43 EMS Academv Section Chief 

5 (2.5 FTE) 

Variable Mandatory Fringe Benefits (11 percent) 


$57,338 
57,338 
57,338 
57,338 
57,338 

35,587 


TOTAL: 


$322,277 



The funds were reserved for the purpose of having the 
Fire Department report back to the Finance Committee 
by December 1, 2002 on its progress towards reorganizing 
its training functions to create an integrated Division of 
Fire and Medical Training, in accordance with 
Recommendations 1.4.1 to 1.4.3 of the Budget Analyst's 

Board of Supervisors 
Budget Analyst 

43 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

January, 2002 Management Audit of the Fire Department 
(see Comment No. 2). These recommendations were 
approved by the Board of Supervisors Rules and Audits 
Committee during its extensive hearings on the Budget 
Analyst's Management Audit Report prior to the Budget 
Committee's consideration of the Mayor's Recommended 
FY 2002-2003 Fire Department budget. The Rules and 
Audits Committee recommended implementation of 
Management Audit Recommendations 1.4.1 to 1.4.3 to the 
Budget Committee. While stating that there would be no 
savings in FY 2002-2003, the Rules and Audits 
Committee noted that there would be future year savings. 
These future year savings are estimated to be $159,374 
annually in 2003 dollars. 1 

Comments: 1. As part of its comprehensive management audit of the 

Fire Department, the Budget Analyst's Office reviewed 
the Fire Department's training and education functions. 
The Budget Analyst's Office concluded in Section 1.4 of 
the Management Audit Report that: 

• Fire Department training and education functions are 
currently spread across the Division of Training, the 
EMS Academy Section of the EMS Division, and the 
EMS In-service Training Section of the EMS Division. 

• Structural and management fragmentation hinders 
integration of the Fire Department's fire suppression 
and emergency medical services responsibilities, 
complicates management accountability, creates the 
potential for unevenly applied training and education 
quality standards, and increases costs. 

2. As a result of these findings, the Budget Analyst's 
Management Audit contained the following 
recommendations: 

• Recommendation 1.4.1: Transfer the EMS Academy 
Section and the EMS In-service Training Section to a 



1 The projected annual savings of $159,374 assume (a) January 4, 2003 pay rates, and (b) a total 
16.8 percent mandatory fringe benefits rate. 

Board of Supervisors 
Budget Analyst 

44 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

renamed Division of Fire and Medical Training during 
FY 2002-2003. 2 

• Recommendation 1.4.2: Recruit widely for the new 
Director of Fire and Medical Training position, 
including advertising for a candidate with both fire 
suppression and emergency medical services training 
experience. 

• Recommendation 1.4.3: Restructure the Division of 
Fire and Medical Training during FY 2002-2003 to 
integrate training and education functions for fire 
suppression and emergency medical services, and to 
reduce the number of staff reporting directly to the 
new Director of Fire and Medical Training position by 
FY 2003-2004. 

3. The Budget Analyst's Management Audit Report 
stated that a reduction in the number of personnel 
reporting directly to the new Director of Fire and Medical 
Training should result in the elimination of five positions 
and the creation of four positions, as follows: 

• Elimination of two Classification H-39 Fire Captain 
positions responsible for the H-3 Academy and 
firefighter r/ecruit training, and elimination of one 
Classification H-43 EMS Academy Section Chief 
position. These three positions to be eliminated would 
be replaced by two positions: (a) one Manager, Cross- 
Training (who could be either Classification H-39 or 
Classification H-43), and (b) one Manager, Recruit and 
EMT Training (who could be either Classification H-39 
or Classification H-43). 

• Elimination of one Classification H-39 Fire Captain 
position responsible for in-service training, and 
elimination of one Classification H-43 EMS In-service 
Training Section Chief position. These two positions 
to be eliminated would be replaced by one position: 
the Manager, In-service Training (who could be either 
Classification H-39 or Classification H-43). 3 



2 The dates contained in the Management Audit Report's recommendations have been updated in 
this report to the Finance Committee in order to accommodate the length of the review period 
between publication of the Management Audit Report, the public hearings held by the Rules and 
Audits Committee, and the budget review conducted by the Budget Committee. 

3 To meet Emergency Medical Services Agency (EMSA) requirements, the successful applicants for 
the three new Division of Fire and Medical Training management positions (the Manager, Cross 
Training; the Manager, Recruit and EMT Training; and the Manager, In-service Training) would 
need to hold a current paramedic, nursing, or medical license. If there are no appropriately qualified 

Board of Supervisors 
Budget Analyst 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



• The teaching and education services currently 
provided by the EMS Academy Section Chief and the 
EMS In-service Training Section Chief should be 
provided by one new Classification H-33 Rescue 
Captain position. 

As noted above, the estimated net personnel cost savings 
from eliminating five existing positions and creating four 
new positions would be $159,374 annually. 

Attachment I is an extract from the Budget Analyst's 
Management Audit Report which compares the current 
organization of the Fire Department's training functions, 
under two divisions, with the recommended organization 
of the Fire Department's training functions under an 
integrated Division of Fire and Medical Training. 

4. By reducing the number of management positions 
which currently have overlapping areas of responsibility, 
and creating new management positions which integrate 
equivalent emergency medical and fire suppression 
training and education functions, the Budget Analyst's 
Management Audit determined that the more 
streamlined Division of Fire and Medical Training would: 

• Adopt a more integrated and strategic approach to 
training and education. 

• Develop clearer management accountabilities. 

• Apply consistent training quahty standards. 

• Result in net estimated savings of $159,374 annually 
in personnel costs. 

5. In Attachment II, a November 27, 2002 memorandum 
to the Finance Committee requesting release of the 
subject reserves, the Fire Chief advises that the Fire 
Department has undertaken the following activities to 
consolidate emergency medical and fire suppression 
training: 



cross-trained staff within the Fire Department to successfully fill these three new positions, the 
Management Audit recommended that the Fire Department advertise for appropriately qualified 
outside applicants. 

Board of Supervisors 
Budget Analyst 

46 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



• The Fire Department conducted its first combined 
emergency medical and fire suppression training 
module in September and November of 2002. 

• The Director of Training is developing a master 
training schedule for 2003 which comprises a number 
of training modules combining emergency medical and 
fire suppression training. 

• The Fire Department instituted a classroom 
reservation and scheduling procedure to coordinate the 
sharing of classroom space and equipment by both 
emergency medical and fire suppression training 
programs. 

• The Director of Training instituted mandatory 
quarterly meetings for emergency medical and fire 
suppression training staff to promote training 
consolidation. 

• The Fire Department established a centralized 
training database. 

• The Director of Training is working with the Real 
Estate Division and the Mayor's Office of Economic 
Development to locate viable sites for a consolidated 
training facility to facilitate cross-training of 
emergency medical and fire suppression staff. 

6. The Fire Department's November 27, 2002 
memorandum to the Finance Committee (Attachment II) 
does not state what progress the Fire Department is 
making towards the structural reorganization 
recommended in the Budget Analyst's Management Audit 
Recommendations 1.4.1 to 1.4.3. Attachment III is a 
December 11, 2002 memorandum, provided by Deputy 
Chief Joseph Asaro of the Fire Department, which 
explains why the Fire Department is not implementing 
the Budget Analyst's recommendations in order to achieve 
an integrated Division of Fire and Medical Training by FY 
2003-2004. According to Deputy Chief Asaro, the Fire 
Department: 

• Supports integration and consolidation of all training 
and education functions under the current name of the 
Division of Training once a common training facility is 



Board of Supervisors 
Budget Analyst 

47 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



available instead of the current three training 
locations. 

• States that "a pool of candidates with both fire and 
medical training does not exist from the rank of H-30 
Captain which is used to fill the H-39 Training 
Captain positions or in the H-33 Paramedic Captain 
which is used to fill the H-43 Section Chief positions." 
The Fire Department contends that the integrated 
Division of Training should support promotional 
opportunities for Fire Department staff who have the 
necessary experience in "site specific fire and 
emergency medical policies, procedures, and standards 
applicable to the San Francisco Fire Department." 

• Objects to a reduction in the number of officers 
responsible for in-service training. 

7. In terms of the issues raised by the Fire Department 
in Attachment III, the Budget Analyst notes that: 

• The Fire Department is not implementing the Budget 
Analyst's Management Audit Recommendations 1.4.1 
to 1.4.3 previously approved by the Rules and Audits 
Committee. 

• Contrary to the Fire Department's statement in 
Attachment III, the organizational restructuring of the 
Fire Department's training and education functions is 
not dependent on relocation of all training functions to 
a single training facility. The Budget Analyst notes 
that the Fire Department was able to conduct its first 
combined emergency medical and fire suppression 
training module in September and November of 2002 
despite not having a single training facility. An 
integrated training and education program can be 
provided from more than one facility. 

• Despite having been responsible for providing 
emergency medical services since July 1, 1997, the 
Fire Department lacks a pool of appropriately cross- 
trained Classification H-39 Fire Captains and 
Classification H-43 EMS Section Chiefs, in terms of 
both (a) the present incumbents of those 
classifications, and (b) the staff who can act in those 
classifications or could promote to those classifications 
once the necessary Civil Service Commission 
certification rule has been adopted. Since July 1, 
1997, the Fire Department has had five years in which 

Board of Supervisors 
Budget Analyst 
48 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



to ensure that its current and future training and 
education providers are appropriately cross-trained, 
but the Fire Department has failed to do so. According 
to Ms. Christine Ragan of the Fire Department, the 
approved emergency medical services merger plan 
never required the Fire Department to cross train 
Classification H-33 Rescue Captains. The Budget 
Analyst considers that cross-training of current and 
future Fire Department training and education 
providers, regardless of their classification, would 
provide role models to encourage more Fire 
Department staff to cross-train. 

• While applicants for the Fire Department's training 
and education management positions from within the 
ranks of the Fire Department would have San 
Francisco Fire Department-specific and San Francisco 
site-specific knowledge, these attributes are not 
sufficient arguments against advertising outside of the 
San Francisco Fire Department for qualified cross- 
trained applicants and hiring them if they are more 
highly qualified. The Budget Analyst notes that: 

(a) Both the Fire Chief and the Chief Financial Officer 
were appointed from outside the Fire Department. 

(b) All non-management positions in the new Division 
of Fire and Medical Training would continue to be 
filled by their current incumbents. Most of these 
current staff have promoted up through the ranks 
of the San Francisco Fire Department. 

(c) All training and education managers should be 
qualified to meet the Federal and State training 
requirements for emergency medical and fire 
suppression services which govern the San 
Francisco Fire Department's policies and 
procedures. 

* The proposed reduction of one training and education 
manager is an efficiency made possible by reducing 
overlapping areas of responsibility. One of the Budget 
Analyst's recommendations is to create one new 
Classification H-33 Rescue Captain position to provide 
the teaching and education services currently provided 
by the EMS Academy Section Chief and the EMS In- 
service Training Section Chief. 



Board of Supervisors 
Budget Analyst 

49 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



8. According to Mr. Martin Gran of the City Attorney's 
Office and Ms. Alice Villagomez of the Department of 
Human Resources, pursuant to the meet and confer 
provisions contained in State law, the City Charter, the 
Administrative Code's Employee Relations Ordinance, 
and the City's Memorandum of Understanding with Local 
798, the Fire Department has the right to: 

(a) Restructure the Fire Department's training and 
education functions, although a new organizational 
structure is subject to a meet and confer process on the 
restructuring's impacts. 

(b) Hire appropriately qualified applicants from outside 
the Fire Department, subject to a meet and confer 
process which considers reduced promotional 
opportunities for existing staff, workload impacts, and 
changed access to overtime. 

When recommending approval of Management Audit 
Recommendations 1.4.1 to 1.4.3, the Rules and Audits 
Committee was fully aware of the Fire Department's need 
to meet and confer with the Firefighters Union over the 
impacts of the recommended restructuring. The Rules 
and Audits Committee specifically directed the Fire 
Department to do everything necessary with respect to its 
meet and confer obligations in order to implement 
Management Audit Recommendations 1.4.1 to 1.4.3. 

9. Although Ms. Ragan states that displaced Fire 
Department employees would result in lay-offs where the 
ranks are filled, the Budget Analyst concludes 
unqualifiedly that no current Fire Department employees 
would need to be laid off as a result of restructuring the 
Fire Department's training and education functions. In 
FY 2002-2003 the Fire Department has 1,926.24 FTE 
positions, of which the five positions presently on reserve 
represent approximately 0.26 percent. Therefore, any 
current training and education managers who are not 
appropriately qualified for the new training and education 
manager positions would, as uniformed staff, be eligible 
for reassignment to the Fire Department's daily minimum 
staffing requirements for emergency medical or fire 
suppression services. 



Board of Supervisors 
Budget: Analyst 

5 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



10. Attachment IV is a December 26, 2002 letter from 
Chief Trevino to Mr. John Hanley, President of the San 
Francisco Firefighters Local 798 regarding the subject 
release of reserves. Chief Trevino states that "if the 
Finance Committee denies the Department's request, 
those five positions will be eliminated and replaced with 
three new Division of Fire and Medical Training 
management positions." As stated in the Ehidget 
Analyst's 30 December, 2002 letter to Chief Trevino 
(Attachment V): 

Recommendations 1.4.1 and 1.4.3, contained in the 
Budget Analyst's January, 2002 Management Audit 
Report of the Fire Department, as previously approved 
by the Board of Supervisors Rules and Audits 
Committee, recommended that the management 
structure for a new integrated Division of Fire and 
Medical Training be instituted during FY 2002-2003, 
so that the new integrated Division would be in place 
by July 1, 2003. Therefore, if the Finance Committee 
were not to approve the proposed release of reserves at 
its January 15, 2003 meeting, the Fire Department 
would still have approximately six months in which to 
restructure its current training and education 
functions into the new integrated Division and to 
recruit for appropriately cross-trained training and 
education managers. 

Once the Finance Committee is satisfied that a 
carefully planned restructuring and recruitment 
process is underway, the Finance Committee could 
still release the reserved funds during the balance of 
FY 2002-2003. Until the Finance Committee releases 
those funds, the Fire Department will need to pay for 
training and education officer salaries from elsewhere 
in the Fire Department's budget. The Fire 
Department must continue to provide emergency 
medical and fire suppression training and education 
which complies with ongoing Federal, State, and local 
regulatory requirements during the balance of FY 
2002-2003. The number of training and education 
officers used to perform those functions during the 
balance of FY 2002-2003 is a management decision for 
the Fire Department. 



Board of Supervisors 
Budget Analyst 

51 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 

The Budget Analyst's Management Audit Report does 
not recommend that the existing five training and 
education positions "be eliminated and replaced by 
three new Division of Fire and Medical Training 
management positions" immediately. Such a 

replacement, and the establishment of one new 
Classification H-33 Rescue Captain position to perform 
emergency medical training and education, for a total 
of four new positions, should only occur within the 
context of a carefully planned restructuring and 
recruitment process. 

11. As stated in the Budget Analyst's Management Audit 
Report Transmittal Letter (pages 5 and 6): 

As the Department moves forward, the lack of 
meaningful integration of its two principal functions 
[emergency medical and fire suppression services] will 
continue to hamper its organizational effectiveness. 
For example, ... many more resources are devoted to 
the Department's fire suppression-focused Division of 
Training than to its training sections within the EMS 
Division, even though 70 percent of the Department's 
workload is emergency medical services related. 4 This 
reflects both a strategic and a training failure, and is 
likely to reinforce some of the cultural friction between 
fire suppression and EMS staff that surfaced during 
our study. 

Recommendation: Disapprove release of the subject reserved funds until the 

Fire Department provides the Finance Committee with a 
plan for the structural reorganization of its training and 
education functions in FY 2003-2004, as recommended by 
the Budget Analyst's Management Audit Report 
Recommendations 1.4.1 to 1.4.3, and as recommended by 
the Rules and Audits Committee of the Board of 
Supervisors. 



4 For example, the current Division of Training has 26 staff under the Director of Training, while 
the two EMS sections responsible for emergency medical services training and education have only 
nine staff under the EMS Chief, plus part-time paramedic and EMT instructors as needed. Ms. 
Ragan states that over 50 percent of the Fire Department's training hours are related to emergency 
medical services. Therefore, over half of the training and education hours are being provided by 
fewer than half of the available training and education staff. 

Board of Supervisors 

Budget Analyst 

5? 



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CITY AND COUNTY OF SAN FRANCISCO Attachment I i 

SAN FRANCISCO FIRE DEPARTMENT Pa 9 e 1 orX 

Lno H. Trevino, Chief of Department ^ ff==:: V *" SECOND STREET 

lernie F.Lee, Acting Deputy Chief of Operations f^^\ SAN FRANCISCO, CA 94107-2015 

oseph C. Asaro, Deputy Chief of Administration X^&^&J- Telephone: (415)558-3400 

November 27, 2002 



Supervisor Aaron Peskin, Chair Finance Committee 

City Hall Room 

1 Carlton B. Goodlett Place 

San Francisco, CA 94107 



Re: Release of Reserves for Training Officers 



Dear Supervisor Peskin: 

The San Francisco Fire Department respectfully requests the release of salaries for Five 
training officers. The salaries for three H-39 Training Captains and two H-43 EMS 
training Section Chiefs for the second half of fiscal year 02-03 were placed on reserve with 
the recommendation that a report be submitted to the Finance Committee detailing the 
progress on our efforts and plans to consolidate fire and medical training. 

These positions provide the medical and fire training needed to fulfill the mission of the 
Fire Department in saving lives and property. Training is one of the most important 
aspects of any modern Fire Department. As such, the Department has implemented the 
following procedures as standard practice in the management of all training functions: 

1. Coordination and scheduling of all training programs, including emergency medical 
training, are developed and approved by the Director of Training. In conjunction with 
all training personnel, the Director of Training is developing the master training 
schedule for 2003. 

As part of this effort, the first combined emergency medical and fire suppression 
training (Module 10) was conducted in September at the Treasure Island Training 
Facility. This training involved the management of a multi-casualty incident at a live 
fire scenario. The use of the Incident Command System (ICS) at a multidisciplinary 
event was reviewed and practiced. This highly successful training module was held as 
a cooperative effort by fire and medical training personnel, and several joint training 
modules will be scheduled as part of the annual training cycle. Additionally, a large 
scale disaster drill was conducted at Candlestick Park on Saturday, November 2" , as a 
follow-up to the joint training. This major drill involved 1000 community volunteers. 
This joint emergency medical and fire-suppression training operation was the first of its 
kind in San Francisco. 



55 



Attachment 1 1 
Page 2 of 2 



2. A classroom reservation and scheduling procedure has been instituted which permits 
fire and medical training programs to share classroom space and equipment. As an 
example, during October and November of this year, the training requirements of the 
Department have greatly exceeded the available training space at all three training sites. 
The collaboration and coordination between the fire and medical training staff 
permitted the Department to overcome a serious classroom scheduling impasse. 

3. The Director of Training has instituted mandatory quarterly staff meetings in an effort 
to have all training personnel work collaboratively towards consolidation. These 
meetings will forge relationships initially and promote a shared base of knowledge and 
experience amongst medical and fire suppression instructors. Eventually, the training 
staff will receive joint staff development in such matters as the creation of cross- 
disciplinary training programs based on modem adult learning methods including 
behavioral objectives, interactive training, and use of medical and firefighting materials. 

4. The Department has established procedures regarding the maintenance of all training 
records including suppression, medical, and technical rescue. Training personnel at all 
three sites have received instruction in the use and management of the centralized 
training database. 



The implementation of a new training facility comprises the third phase of the 
Department's plan. The Director of Training has made a concerted effort to work with the 
Department of Real Estate and the Mayor's Office of Economic Development to locate 
viable sites for a consolidated training facility. The physical separation of the Department's 
training facilities and the continued need to crosstrain all members of the training staff 
represent challenges in coordinating emergency medical and fire suppression training. 
Furthermore, the proposed development of Treasure Island does not include the existing 
live bum facility, which further emphasizes the need to identify a consolidated fire and 
emergency medical training facility. 

The Department remains committed to providing high quality training for its members and 
the best possible service to the community we serve. The release of training staff salaries 
will permit us to continue in this endeavor. Your assistance in this matter is gratefully 
appreciated. 



Sincerely, 



.s&mZc^O 




_Mario H. Treviho 
Chief of Department 



CC: Ben Rosenfield. Mayor's Office of Finance and Legislative Affairs 
Gloria Young. Clerk of the Board 
San Francisco Fire Commission 
Har\e\ Rose. Buduet Analyst 



56 



Attachment III 
Page 1 of 4 
CITY AND COUNTY OF SAN FRANCISCO 

SAN FRANCISCO FIRE DEPARTMENT 

Mario ft Trevino, Chief ofDepartment ^TX ^ ^^ S71 ^ ET 

Berne F. Lee, Acting Deputy Chief or Operations fs^J^X SAN FRANCISCO - CA 94107.2015 

Joseph C.Asaro, Deputy Chief of Administration V^SlN^/ Telephone: (415)558-3400 



December 11,2002 



Supervisor Aaron Peskin, Chair Finance Committee 

City Hall Room 

I Carlton B. Goodlett Place 

San Francisco, CA 94107 



Re: Release of Reserves for Training Officers 



Dear Supervisor Peskin: 

The Department supports integration and consolidation of all training and 
education functions whenever possible. As such, the Department has outlined a three 
phase plan for integration of all training and relocation at a common site in previous audit 
responses which maintains the current name of the Division of Training and supports 
promotional opportunities for members of the Department. 

Training is one of the most critical functions of fire and emergency medical 
services, and the Department requires all of its existing training resources to meet its goal 
of improving and expanding tr ainin g programs over the next several years. 

A clear indication of the progress obtained by the Department is the deployment 
of 18 advance life support (ALS) engine companies. In February 2003, the number of 
ALS engines will expand to 25, further blending fire and emergency medical operations 
and improving service to the citizens of the City and County of San Francisco. 

iuS auuit suggests t^e numucr Ci training ouaccrs responsiuiS ior in-service 
training be reduced which would severely impact the effective development and 
implementation of fire and medical training activities. Both fire and medical services 
officers often participate in various committees both within and outside of the 
Department that require specific expertise. These officers attend professional training 
programs, conduct performance reviews, meet with students, review class evaluation 
forms, and schedule instructors. Combining training functions does not reduce the 
amount of this activity. 



57 



Attachment III 
Page Z of 4 



With the anticipated retirements of approximately 14% of our uniformed 
employees over the next three years, the need for a fully staffed Training Division is of 
paramount importance. The salaries for three H-39 Training Captains and two H-43 
Training Section Chiefs for the second half of fiscal year 2002-2003 were placed on 
reserve with the recommendation that a report be submitted to the Finance Committee 
detailing the progress on our efforts and plans to consolidate fire and medical training. 

The letter dated November 27, 2002 to the Finance Committee outlined the 
progress the Department has made in combining fire and medical training. It remains the 
Department's goal to combine medical and fire training at one location. Currently 
training is provided at three separate locations: 

e 19 & Folsom - Fire suppression training for new hires, Haz Mat 

recertification, and a 7 story fire training tower for probationary members and 

In-service training 
e Presidio - Emergency medical training, certification and recertification 
■ Treasure Island - Live burn training, specialized training (i.e. search and 

rescue, engine and truck drills, roof ventilation drills), wild land training, and 

required maritime training 

Last fiscal year, the Fire Department conducted 106,021 hours of training at these 
three sites. That averages to 21,204 hours of training managed by the existing 5 training 
positions whose salaries are on reserve. These numbers do not include the hours to 
supervise and participate in the development, implementation and evaluation of training 
programs, continuing education, policies, curriculum and activities, and coordinating and 
implementing changes to training modules as required by local, state or federal law as 
well as change in safety standards. They are required to ensure that all training is 
properly tracked and a data base of training is maintained to ensure compliance to 
mandates and standards. 

The H-39 Training Captains require expertise, experience and knowledge of fire 
suppression. These positions coordinate and supervise all Department training activities, 
prepare training curriculum and documentation, maintain and review all training records, 
identify and assess current and future training needs, and assist with research and design 
and development of specialized workshops, seminars and orientation programs. The H- 
43 Training Section Chiefs require experience in medicine and the management of an 
adult educational program. These positions require extensive field experience as a 
paramedic and the paramedic academy curriculum is entirely medical in nature. 



58 
DEC-l 1-2002 16=53 



Atta c hnten c III 
Page 3 of 4 



In summary, the duties and responsibilities of the H-39 Captains and the H-43 
Training Section Chiefs include but are not limited to the following: 

• H-39 Recruit Training Officer 

Responsible for oversight of H-2 Firefighter Recruit Academy, monthly 
evaluations of Probationary Field Training; coordination support and 
evaluation of San Francisco Fire Department Reserves 

• H-39 In-Service Training Officer 

Responsible for oversight of In-Service Training of all uniformed 
members of the San Francisco Fire Department; provides on-going 
training and evaluation of front line firefighters, officers, companies and 
units. 

• H-39 H-3 Academy Officer/Treasure Island Training Facility Coordinator 

Responsible for oversight of H-3 Firefighter/Paramedic Academy and 
monthly evaluations of Probationary Field Tr ainin g; Coordinator of all 
activities at the Treasure Island Training Facility including tracking and 
scheduling all activities, oversight of fee schedule and assistance with 
oversight of maintenance contract. 

• H-43 Section Chief - In-Service Training Section 

Coordinates and implements all manner of medical training for the 1,880 
members of the Department. Directs a continuous cycle of framing 
designed to provide all required medical framing of paramedics, EMT's 
and First Responders mandated by local, state, and federal regulations. 
Manages an aggressive program that provides and tracks over 25,000 
hours of training annually. This individual protects the legal authority of 
the Department to provide emergency medical care to the community by 
mamtaining the licensure and certification of all its employees. 

• H-43 Section Chief - EMS Academy 

Responsible for all new emergency medical training including the H-2 
probationary EMT class, the Paramedic Training Program, framing for 
paramedic preceptors, preparation for the National Registry Paramedic 
examination, EMT-ambulance training, and houses all material as a 
training center for American Heart Association (AHA). The AHA 
certifications in CPR and ACLS are mandated for all members in the 



A recommendation was made in the audit report to require that all training 
officers possess a current paramedic, nursing or medical license. However, a pool of 
candidates with both fire and medical training does not exist from the rank of H-30 
Captain which is used to fill the H-39 Training Captain positions or in the H-33 
Paramedic Captain which is used to fill the H-43 Section Chief positions. Hence, the 



59 

DEC-l 1-2002 16=54 



Attachment III 
Page 4 of 4 



only way to implement the audit recommendation would be to recruit from outside the 
Department. This would not only trigger meet and confer with Fire Fighters Local 798 
but would also be detrimental as members from the outside would not be experienced and 
knowledgeable in site specific fire and emergency medical policies, procedures, and 
standards applicable to the San Francisco Fire Department. 

Emergency medical and fire suppression instructors bring a great deal of 
knowledge and experience in their respective disciplines but lack cross over experience at 
this time. Recent efforts by the Division of Training to coordinate the existing, highly- 
experienced training staff has accomplished, in large part, the goal' and spirit of 
integrating SFFD training functions. 

In the future, as outlined in the Department's three phase plan, greater cross over 
training for employees will create an internal pool of resources and provide opportunities 
for employees to progress and promote in the Department to these positions. 

The need for continued high quality framing with adequate and appropriate 
staffing is evident. Training cannot be compromised because it so directly impacts the 
ability to deliver quality service, a safe working environment and the fulfillment of our 
Mission Statement. 



Sincerely, . 

C/josepn Asaro 

Deputy Chief of Administration 



Mario H. Trevifio, Chief of Department 

Ben Rosenfield, Mayor's Office of Finance and Legislative Affairs 

Gloria Young, Clerk of the Board 

San Francisco Fire Commission 

Harvey Rose, Budget Analyst 



60 



DEC-1 1-2002 16=55 



^, n ™,^n.iTm»vTPicpn Attachment IV 

CITY AND COUNTY OF SAN FRANCISCO 



SAN FRANCISCO FIRE DEPARTMENT PageTof^ 

_.__.„ _*„ * ,^s tf = : ^ 698 SECOND STREET 

io HL Trevino, Chief of Department J^ 7fC\y 

„ondRBaIzarini,DeputyChiefofOperation S (gP^] SAN FRANCISCO, CA 94107-2015 

phC.Asaro, Deputy Chief of Administration V^W Telephone: (415)558-3400 



December 26, 2002 



John Hanley 

President 

San Francisco Firefighters Local 798 

1139 Mission Street 

San Francisco, CA 94103 



Dear Mr. Hanley: 

On January 15, 2003, the Fire Department will have a hearing before the Finance 
Committee to consider the release of reserve funds, Fire Department fiscal year 2002-2003 
budget, for the salaries of five training officers (three H-39 Training Captains and two H-43 
EMS Training Section Chiefs). The purpose of this letter is to give you an update as to the 
possible actions that the Finance Committee may take on January 15, 2003. 

As we understand it, if the Finance Committee denies the Department's request, those 
five positions will be eliminated and replaced with three new Division of Fire and Medical 
Training management positions. In addition, the Budget Analyst's Office recommends that these 
newly created positions hold a current paramedic, nursing, or medical license. 

As stated in the report from the Budget Analyst's Office, pursuant to the meet and confer 
provisions contained in State law, the City Charter, the Administrative Code's Employee 
Relations Ordinance and the City's Memorandum of Understanding with Local 798, the Fire 
Department has the right to: 

• Restructure the Fire Department's training and education functions, although a new 

organizational structure is subject to meet and confer process on the impacts of the 

restructuring; 
s Flire appropriately qualified applicants from outside the Fire Department, subject to 

meet and confer over impact, which may include reduced promotional opportunities 

for existing staff, workload impacts and safety. 



61 



Attachment IV 
Page 2 of 2 



Should the release of reserves be denied, the Department will be contacting Local 798 at 
that time to make arrangements to begin the meet and confer process. 

Very truly yours, 



MARIO H. TREVINO 
Chief of Department 






By/'/^oseph C. Asaro 

Deputy Chief of Administration 



Harvey Rose, Budget Analyst's Office 
Aaron Peskin, Finance Committee Chair 
Chris Daly, Finance Committee Member 
Sophie Maxwell, Finance Committee Member 
Tony Hall, Rules and Audit Committee Chair 
Alice Villagomez, DHR/ERD 



62 



Attachment V 




CITY AND COUNTY 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 MARKET STREET, SUITE 1025 

SAN FRANCISCO, CALIFORNIA 94102 • TELEPHONE (415) 554-7642 



December 30, 2002 



Mario H. Trevino 

Chief of Department 

San Francisco Fire Department 

698 Second Street 

San Francisco, CA 94107-2015 



Dear Chief Trevino, 

Thank you for a copy of your December 26, 2002 letter to Mr. John Hanley, 
President of San Francisco Firefighters Local 798, which was signed by 
Deputy Chief Asaro. We wish to clarify the second paragraph of your letter 
where you state that "... if the Finance Committee denies the Department's 
request, those five positions will be eliminated and replaced with three new 
Division of Fire and Medical Training management positions." 

Recommendations 1.4.1 and 1.4.3, contained in the Budget Analyst's 
January, 2002 Management Audit Report of the Fire Department, as 
previously approved by the Board of Supervisors Rules and Audits 
Committee, recommended that the management structure for a new 
integrated Division of Fire and Medical Training be instituted during FY 
2002-2003, so that the new integrated Division would be in place by July 1, 
2003. Therefore, if the Finance Committee were not to approve the proposed 
release of reserves at its January 15, 2003 meeting, the Fire Department 
would still have approximately six months in which to restructure its current 
training and education functions into the new integrated Division and to 
recruit for appropriately cross-trained training and education managers. 

Once the Finance Committee is satisfied that a carefully planned 
restructuring and recruitment process is underway, the Finance Committee 



63 



Attachment V 

Mario H. Trevino Page Z of Z 

Chief of Department 

San Francisco Fire Department 

December 30, 2002 

Page 2 

could still release the reserved funds during the balance of FY 2002-2003. 
Until the Finance Committee releases those funds, the Fire Department will 
need to pay for training and education officer salaries from elsewhere in the 
Fire Department's budget. The Fire Department must continue to provide 
emergency medical and fire suppression training and education which 
complies with ongoing Federal, State, and local regulatory requirements 
during the balance of FY 2002-2003. The number of training and education 
officers used to perform those functions during the balance of FY 2002-2003 
is a management decision for the Fire Department. 

The Budget Analyst's Management Audit Report does not recommend that 
the existing five training and education positions "be eliminated and replaced 
by three new Division of Fire and Medical Training management positions" 
immediately. Such a replacement, and the establishment of one new 
Classification H-33 Rescue Captain position to perform emergency medical 
training and education, for a total of four new positions, should only occur 
within the context of a carefully planned restructuring and recruitment 
process. 



Respectfully submitted, 




Harvey M. Rose 
Budget Analyst 



Deputy Chief Joseph Asaro, Fire Department 
Mr. John Hanley, President, San Francisco Firefighters Local 798 
Supervisor Aaron Peskin, Chair, Finance Committee 
Supervisor Chris Daly, Vice-Chair, Finance Committee 
Supervisor Sophie Maxwell, Finance Committee 
Supervisor Tony Hall, Chair, Rules and Audits Committee 
Supervisor Matt Gonzalez, Vice-Chair, Rules and Audits Committee 
Ms. Alice Villagomez, Department of Human Resources 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

64 



Memo to Finance Committee 

January 15, 20Q3 Finance Committee Meeting 



Item 6 -File 02-1984 

Department: 

Item: 



Amount: 
Grant Period: 

Source of Funds: 

Required Match: 
Indirect Costs: 
Description: 



Budget: 



Comments: 



Department of Public Health (DPH) 

Resolution authorizing the Department of Public Health 
(DPH) AIDS Office to accept and expend retroactively the 
second year of a grant in the amount of $650,000 from the 
U.S. Department of Health and Human Services (HHS) 
Office of Minority Health to improve AIDS related health 
outcomes for women and minorities and authorizing the 
DPH to enter into an agreement with HHS for the use of 
these funds; for the period of September 30, 2002 to 
September 29, 2003. 

$650,000 

September 30, 2002 to September 29, 2003 (One year, see 

Comment No. 1) 

U.S. Department of Health and Human Services (HHS), 
Office of Minority Health 

None 

$12,133 (16% of total personnel costs of $75,823) 

The U.S. Office of Minority Health awarded the DPH the 
subject $650,000 grant to improve survivor rates for 
minority women, transgender individuals, youth, African- 
American men and monolingual Latinos with HIV/AIDS, 
by increasing access to health care and eliminating 
disparities in access to care. The subject grant would 
provide HIV treatment and advocacy and health care, at 
four locations in San Francisco: (1) Dolores Street 
Community Services, (2) Mission Neighborhood Health 
Center, (3) San Francisco General Hospital Medical 
Center and (4) the University of California - San 
Francisco Positive Health Practice. 

The proposed budget for the subject grant totaling 
$650,000 is shown in Attachment I, provided by the DPH. 

1. The subject grant period began on September 30, 2002, 
and the proposed resolution provides for retroactive 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

65 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



acceptance and expenditure of these funds. Ms. Brenda 
Walker of the DPH advises that the proposed resolution is 
coming before the Board of Supervisors only now, over 
three months after the grant period began, because of 
administrative delays. Ms. Walker advises that no funds 
from the subject grant have been accepted or expended. 
Therefore, the proposed resolution should be amended to 
remove retroactivity. Ms. Walker also advises that the 
DPH has not received authorization from the U.S. Office 
of Minority Health to extend the grant period beyond 
September 29, 2003. 

2. Ms. Walker states that the subject grant, during the 
second year of a two-year grant, would fund four 
contracts, each to be awarded on a sole source basis based 
on the contractors' expertise and the contractors' 
participation in the first year of this two-year grant. As 
shown in Attachment I, contractual services total 
$562,044 of the total grant amount of $650,000. 

A contract of $65,850 would be awarded to Dolores Street 
Community Services, a nonprofit agency. Ms. Michelle 
Long-Dixon of the DPH reports that this $65,850 contract 
would provide outreach and referral services to Latino 
men accessing their shelter services. 

Ms. Long-Dixon advises that a $70,440 contract would be 
awarded to the Mission Neighborhood Health Center, a 
nonprofit agency, to provide outreach to Latinos, provide 
increased HIV testing and counseling services and 
support HIV treatment adherence. 

The University of California - San Francisco (UCSF) 
would be awarded a $158,556 contract to augment their 
comprehensive multidisciplinary primary care services for 
African-American men with outreach, treatment advocacy 
and case management services in UCSF's Men of Color 
Program. 

Ms. Long-Dixon also reports that DPH would enter into a 
$267,198 Memorandum of Understanding (MOU) with 
San Francisco General Hospital to support its outpatient 
HIV clinic and to increase efforts in adherence, prevention 
and outreach to the HIV-infected. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

66 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



Attachment II, provided by the DPH, provides 
explanations and budget details to support each of these 
contracts. 

Attachment III, provided by the DPH, contains budget 
details for the first year of the subject grant (September 
30, 2001 through September 29, 2002, with extension to 
December 31, 2002), which totaled $1,105,000. 

3. The subject grant funds a .30 FTE Director position 
and a .40 FTE Health Program Coordinator position. 
According to Mr. James Alexander of DPH these two 
positions totaling .70 FTE are currently "G" coded, or 
grant-funded positions that would terminate when the 
subject grant expires. Further, the proposed resolution 
requests that these .70 FTE positions continue to be "G" 
coded. According to Ms. Walker, the .30 FTE Director, 
HPV^ Health Services position is responsible for the 
management, planning, and day-to-day operations of the 
DPH HIV Health Services. Ms. Walker also reports that 
the other position, a .40 FTE Health Program Coordinator 
III position, is responsible for developing and 
implementing program services as well as serving as a 
liaison between the DPH and contractors. 

4. Attachment IV is the Grant Information Form, 
provided by the DPH, which includes the Disability 
Access Checklist. The Grant Information Form states 
that $562,035 has been budgeted for contractual services. 
However, as previously noted in Attachment I and as 
reported by Ms. Walker, the correct amount budgeted for 
contractual services is $562,044. 

Recommendations: 1. In accordance with Comment No. 1, amend the 

proposed resolution by deleting the word "retroactively" in 
lines 4 and 18 on page one of the proposed resolution. 

2. Approve the proposed resolution, as amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

67 



Atta chment I 
Wage 1 ot 2 

San Francisco Department of Public Health (SFDPH) 

AIDS Office 

HIV Health Services Section 

HTV CARE AND RELATED SERVICES FOR WOMEN AND MINORITIES 

BUDGET JUSTIFICATION 

(September 30, 2002 - September 29, 2003) 



A. PERSONNEL 

B. MANDATORY FRINGE 

1. 0.30 Director, HIV Health Services: M. Dixon, MPH 
Annual Salary $28,720 

Mandatory Fringe Benefits @ 25.00% = $7,180 $35,901 

This position is responsible for the management, planning, and day-to-day operations of 
SFDPH HTV Health Services. The Director oversees the activities of and provides 
direction to the overall Program including reviewing contract status, progress and 
monitoring reports, budget requests and other administrative functions. 

2. 0.40 Health Program Coordinator HI: J. Cecere 
Annual Salary $29,368 

Mandatory' Fringe Benefits @ 25.00% = $7,342 $36,71 

This position is responsible for the development and implementation of Program services. 
This position will provide programmatic oversight and monitoring of primary care and 
integrated services programs. Serves as liaison between contractors 'and SFDPH. 
Performs program monitorings and progress reports, monitoring contractor performance. 

3. COLA/STEP increases: 

The salary expenditures are based on the rates per job classification and Labor Union 
Agreements. The cost for COLA and Step Increases are as follows: COLA @ 3% = 
$1,785 and Step Increases @ 5% = $1,428 $3,213 

Total Personnel: $75,823 

Total Salaries $61,301 

Total Fringe $14,522 

PERSONNEL SUBTOTAL: $75,823 

C. TRAVEL $0 



68 



Attachment! 
Page Z of Z 

D. EQUIPMENT $0 

E MATERIALS AND SUPPLIES $0 

F. CONTRACTUAL 

Dolores Street Community Services $65,850 

HTV Peer Advocacy Program 

Mission Neighborhood Health Center $70,440 

Outreach; HIV Counseling, Testing, & Referral; and Treatment Advocacy 

San Francisco General Hospital Medical Center $267,198 

Increased Efforts in Adherence, Prevention, & Outreach to the HIV-infected 

UCSF Positive Health Practice (Men) $158,556 

Men of Color Program - Outreach, HIV Treatment & Peer Advocacy 

CONTRACTUAL SUBTOTAL: $562,044 

G. OTHER $0 

TOTAL DIRECT EXPENSES: $637,867 

H. INDIRECT COSTS (16% of total modified direct costs) $12,133 

TOTAL BUDGET: $650,000 



69 



Attachment jj 

Page 1 of 11 



Dolores Street Community Services 

HIV Care and Related Services for Women and Minorities Grant 

(September 30, 2002 - September 29, 2003) 



BUDGET JUSTIFICATION 
Direct Expenses , , . 

Salaries & Benefits: 

-V 

Peer Counselor: (Vacant) - responsible for creating and maintaining on site health outreach, 
education, case management program targeting Latino mono and bilingual men who have sex 
with men who are homeless. 

Salary: 1 FTE = S 35,000 

Benefits: 28 % of Salary = 59,800 

Total Salaries & Benefits S 44,800 

EQUIPMENT / COMPUTER SUPPLIES - Funds are requested to purchase one desktop 
computer and printer which will be located at 938 Valencia which will be used to perform data 
entry of client information for internal tracking purposes and government reporting. This 
computer will have internet access to obtain resources for clients; computer paper. & toner. 

One Computer - S 650 
One Printer - S 100 

Computer Supplies - S 20.83 x 12 mos. S 250 S 1.000 

PROGRAM SUPPLIES - Funds are requested to purchase safer sex educational materials, 
posters, special activity supplies, etc. 

Supplies - S 83.33 x 12 mos. S 1.000 

OFFICE SUPPLIES - Funds are requested to purchase office supplies to implement program. 
Such supplies include: easels, markers, paper pad, and appointment cards. 

Supplies - S 41 .67 x 12 mos. S 500 

FOOD & BEVERAGES FOR GROUP - Funds are requested to purchase bottled water, soda 
and extra, food for group meetings. 

Food - S 83.33 x 12 mos. S 1.000 

OUTREACH MATERIALS / TRANSLATION SERVICES - Expenses to be used for 
program materials to be printed, copied and translated in any language as needed. 

\ 

Printing, copying and translate materials S 166.67 x 12 mos. S 2,000 



70 



Attachment II 
Page 2 of 11 
CONFERENCE AND TRAVEL - These funds will be utilized for one staff for trips to any 
educational training needed for the program. We may also need to pay travel expenses for start up 
consultant. 

Local Travel Costs: S 500 

Out of town travel costs 5 1 ,00.0 S 1,500 

CLIENT TRANSPORTATION - These expenses will be used to purchase bus passes, gas for the 
van, or any other means of transportation for clients to travel to clinic sites or to meet with the 
peer counselor and study participants, etc. 

Local Transportation -. S 41.67 x 12 mos. $ 500 

POSTAGE - These funds will be used for postage to implement the program. 

Postage -S 16.67x12 mos. £ 200 

RENTAL SPACE - These funds will be used to pay a share of the rent at 93S Valencia for the 
HFV Peer Counselor and space for the program activities. 

Rent- $300 x 12 mos. S 3,600 

UTILITIES - These funds will be used to pay the utilities to implement the program. 

Utilities S 600 

TELEPHONE - These funds will be used to pay telephone to implement the program. 

Telephone S 600 

Total Direct Expenses S 57.300 

INDIRECT EXPENSES 

Executive Director: Responsible for all aspects of operations at Dolores Street Community 
Services. Performs role of Director of Programs and Director of Development as well. 

.060 FTE x 565,000 salary = S 3,900 

Bookkeeper: Responsible for all invoicing of contracts, payment of sub contracts and payroll 
processing and various human resources tasks. 

.828 FTE x $34,000 salary = S 2,8 15 

Benefits: 28% of salaries = 51,835 

I 
Total Indirect Expenses - S 8,550 

Total Contract Budeet - 5 65.850 



71 



• - Pagel 

.Attachment IT 
Page 3 of 11 

Mission Neighborhood Health Center 
HIV Services 

Outreach, Confidential HIV Testing & Counseling, Referrals and Treatment Adherence 

Services for HIV+ Latiao MSM 

A. PERSONNEL 

B. MANDATORY FRINGE 

1. HIV Testing Coordinator (0.250 FTE)- Eduardo Antonio "* 

Annual salary S 8,029 

Fringebenefits@24% 81,927 59,956 

This position is responsible for the coordination and implementation of the Confidential HIV 
Testing Program at MNHC. Assists in the provision HIV risk reduction counseling, risk 
assessment and disclosure sessions and coordinates street and community outreach. Coordinates 
recruitment and hiring of volunteer counselors. Supervises and provides training and support to 
HIV Testing Counselor and Treatment Link Specialist. Responsible for the maintaining the 
program statistical data base and prepares monthly program reports to the HIV Services Director. 
Attends meetings with community partners. 



2. HIV Testing Counselor (1 FTE) TBA 
Annual salary ' 530,000 

Fringe benefits @ 24% S7,200 537,200 

This position is responsible for providing HIV risk reduction counseling, risk assessment and 
disclosure sessions to persons seeking HIV testing, Provides referrals to clients as needed and 
follow-up for clients not returning for their results. Works with Treatment Link Specialist in the 
conduction of street and community outreach. . Assists in maintaining the program statistical 
database. 

3 . Treatment Link Specialist (0.625 FTE) TBA 
Annual salary 516,250 

Fringe benefits @ 24% 5 3,900 -520,150 

This position is responsible for conducting street and community outreachto'targetedpopulation.' 
Provides information, education and peer counseling outside the clinic to at-risk individuals who 
have not tested for HIV or to HIV-positive individuals that are out or care. Takes clients who are 
interested in HIV testing to the clinic, and refers and links clients to needed services. Assists 
HIV testing counselors at the clinic on testing days. Assists in maintaining the program statistical 
database. 

I 

4. HIV Services Director (0.025 FTE)- Fernando Gomez-Benitez 

Annual salary 51,365 

Fringe benefits© 24% 5 328 51,693 



72 






Attachment ' I j 
Page 4 of 11 

This position is responsible for the program development, the coordination of various contracts 
and the overall program implementation. 'Responsible for the fiscal and administrative 
supervision of this program. Supervises and provides training and support to the HIV Testing 
Coordinator. Prepares quarterly, year-end and monitoring reports to the funding sources. 

Total Personnel: S 6S,999 

Total Salaries 5 55,644 

Total Fringe benefits S 13,355 

Total Personnel $68,999 

C. TRAVEL 

1. Travel: Local S 420 

These funds will be used for the purchase of one monthly bus pass for staff (Treatment Link 
Specialist and HIV Test Counselor) to conduct street and community outreach to targeted 
population. 

Breakdown of local travel costs: 

S35/bus pass x 1 staff person x 12 months = S420 

2. Travel: Out of Jurisdiction . SO 

Total Travel S420 

D. EQUIPMENT SO 

E. MATERIALS AND SUPPLIES 

1. Office Supplies S250 

Funds are requested to purchase office supplies necessary to implement the program. Such 
supplies include: paper, pens, folders for client charts, envelopes, etc. 

2. Outreach Supplies -S771 

Funds are requested to purchase outreach supplies for the prevention/information kits distributed 
among the target population (kit is a resealable plastic bag that includes condoms,4ubricant$, 
outreach cards, etc.) 

Total Material and Supplies Sl,021 

F. CONTRACTUAL SO 

G. OTHER SO 



73 



Attachment Tr 
Page 5 of n 
TOTAL DIRECT EXPENSES 570,440 

H. INDIRECT COSTS so 

TOTAL BUDGET # 570,440 



74 



Attachment I I 
Page 6 of 11 

San Francisco Department of Public Health 

San Francisco General Hospital Medical Center 

Positive Health Program (Ward 86) 

(September 30, 2002-September29, 2003) 

POSITIVE HEALTH PROGRAM (PHP) CLINICAL SERVICES AND TECHNICAL 

INFRASTRUCTURE PROPOSAL TO INCREASE EFFORTS IN ADHERENCE, 

PREVENTION, AND OUTREACH TO HIV-INFECTED POPULATIONS 

A. PERSONNEL 

B. MANDATORY FRINGE 

1. 1.0 UC Case Manager: vacant , S83.800 
Annual Salary 568,130 

Mandatory Fringe Benefits® 23% = SI 5,670 

This position is responsible for providing case management of PHP clients particularly in 
improving their adherence to their HIV medications. This position will work with both 
the client and the PHP staff in improving adherence strategies. In addition, this position 
will also work closely with the Women's Integrated Delivery Services (WIDS) in 
identifying women infected with HIV in an effort to link them to PHP and improve their 
health status by improving their adherence to HIV medications. 

2. 1.0 UC Placement 'Coordinator: vacant 5100,375 
Annual Salary 581,606 

Mandatory Fringe Benefits @ 23%= 518,769 

This position is responsible for triaging clients and identifying the proper level of care for 
each client. In identifying the proper level of care, placement coordinator is responsible 
for performing an initial assessment on the client. The position will particularly focus on 
WIDS clients. 

3. 1.0 UC Outreach Worker: vacant 550,650 
Annual Salary S41.179 

Mandatory Fringe Benefits @ 23%= S9.471 

This position is responsible for performing outreach efforts in identifying those infected 
with HIV who do not currently have a source of primary care and linking them to PHP 
services. Outreach efforts will be focused on DPH treatment areas (i.e. Emergency 
Department, Needle Exchange sites, Inpatient Acute) as well as the neighboring Mission 
community. 

Total Personnel 5234,825 

Total Salaries SI 90,91 5 

Total Fringe S43,910 

TOTAL PERSONNEL S234,825 



75 



Attachment II 
Page 7 of 11 

C. TRAVEL $0 

D. EQUIPMENT SO 

E. MATERIALS AND SUPPLIES SO 

F. CONTRACTUAL 

Information Systems Consultant $32,364 

Over a 12-month period, consultant would provide 

expertise from a technical systems integration vantage point to facilitate onsite 

implementation and integration of each components into the existing system 

technical support for troubleshooting and resolving system problems during the first 

year of project implementation 

training to system users and create a user training manual for ongoing training needs 

for the system 

and would work in tandem with design engineers to facilitate the design process and 

system solutions for incorporation into program's architecture. 

TOTAL CONTRACTUAL S32 } 364 

OTHER SO 

TOTAL DIRECT EXPENSES S267.189 

TOTAL BUDGET S267,1S9 



76 



Attachment I I 
Page 8 of 11 

Positive Health Practice (PHP) at UCSF / Black Coalition on AIDS (BCA) 

MEN OF COLOR PROGRAM (MOCP) at PHP -UCSF 

BUDGET JUSTIFICATION 

(September 30, 2002 - September 29, 2003) 



A. PERSONNEL 

B. MANDATORY FRINGE 

1. 1.0 Treatment Advocate/Peer Advocate: vacant 
Annual Salary S36.504 

Mandatory Fringe Benefits @ 17°/ = S6206 S42.710 

This position will provide outreach via the BCA and direct services including; assessment 
of a clients concrete obstacles to medical care (e.g. transportation, childcare etc.), 
assistance with completing applications for Paratransit, housing, etc.; referral to WSP or 
MOCP social worker for comprehensive psycho-social assessment; referral to pharmacy 
services and liaison with community pharmacies to assure accurate and timely refills, 
home delivery and communication on behalf of the patient, referral and liaison to Action 
Point; assessment, relationship-building and counseling to understand a client's beliefs 
about starting HIV medications; home visits to assist patients with filling their medi-set; 
calling in prescription refills; 'providing general emotional support to clients and their 
families including being readily available by pager to discuss any adverse events related 
to taking medications or HIV disease; being available to clients by pager and can act as 
liaison to accessing other aspects of healthcare that many take for grant such as reaching 
the 'on-call' physician for medical issues after-hours; escorting patients to the clinic and 
other important medical appointments as well as to drug or mental health intakes; liaison 
to residential drug treatment programs to assure adherence; working with Social Worker 
to create, recruit for, and facilitate a support group for target population; and providing 
smooth communication between the client, the program staff and our clinic. The TA/PA 
will also be responsible for review patient client status by reviewing monthly REGGIE 
reports with CM and SW to identify clients lost to care. The TA/PA will be responsible 
for trying to find such clients and reengage them into care. The TA/PA will complete the 
HIV Treatment, Education, and Certification program and their monthly updates as well 
as receive updates from the MOCP HIV Coordinator to remain knowledgeable about the 
latest treatments and be able to articulate some of the pros/cons of treatment to 
individuals and groups, 

2. 0.5 Case Manager: vacant 

Annual Salary S20.000 

Mandatory Fringe Benefits @ 17% = S3.400 S23.400 

This position is responsible for MOCP service integration, and is designed to address the 
daily living and survival issues that hinder an HIV+ African-American from access to 



77 



Attachment 1 1 
Page y of 11 

effective medical treatment. The position is responsible for providing comprehensive 
case management services for a part-time caseload of 15-20 active clients at PHP-UCSF 
and BCA including care coordination, intake, development of care plans, counseling, 
advocacy, referrals, follow-up, and documentation (remaining .5 FTE of activity will be 
funded by BCA devoted to activities on their Circle of Care Project). All Case 
Management activities will be delivered according to the seven core activities that 
comprise HIV Case Management as defined in Making the Connection: Standards of 
Practice for Client-centered HIV Case Management. The Case Manager will deliver 
services during regular hours on-site at PHP-UCSF and BCA. Case management 
scheduling will be determined by and coordinated between sites by the PHP-UCSF Social 
Worker, The CM will also be responsible for review patient client status by reviewing 
monthly REGGIE reports with TA/PA and SW to identify clients lost to care. In addition 
to meeting the qualifications for Case Management positions, this person will be screened 
for and hired according to their cultural and sexual orientation sensitivity and their 
understanding of and agreement with harm reduction practices. The case manager will 
participate in the CARE funded HIV Treatment, Education, and Certification program 
and their monthly updates as well as receive updates from the MOCP HIV Coordinator. 

3. 0.25 Clinical Social Worker: Darren Wood 
Annual Salary 510,500 

Mandatory Fringe Benefits © 17% = S1,7S5 312,285 

This position is responsible for supervising the TA/PA including working with TA/PA on 
support group for target population; supervising case manager including meeting with 
case manager 2hrs/week to review cases; will provide comprehensive psychosocial 
assessment of clients; and will assist in referrals to appropriate CBO's for issues related 
to substance abuse and psychosocial needs. The SW will also be responsible for review 
patient client status by reviewing monthly REGGIE reports with CM and TA/PA to 
identify clients lost to care. 

4. 0.15 MOCP Coordinator. Susan Coffey, MB 
Annual Salary 514,250 

Mandatory Fringe Benefits @ 17.00% = S2,423 516,673 

This position is responsible for coordinating the activities of the MOCP and for all issues 
related to patient services that are a part of the MOCP including development of MOCP 
clinic protocols, supervising continuous quality improvement efforts, and preparation of 
reports related to the MOCP. In addition, this position will be an educational resource for 
the MOCP and BCA staff including the TA/PA, Case Manager, and Social Worker so 
that they have accurate, timely and safe information about treatment and research options 
(monthly l in-services'; will provide educational sessions/Q&A aimed at the target 
population held in the field e.g. at BCA to further facilitate bringing clients into care by 
providing a familiar face to the concept of 'HIV provider' and addressing basic questions 
and concerns prior to actual utilization of healthcare system. 



78 



Attachment II 
Page 10 of 11 

5. 0.20 Pharmacist: vacant 
Annual Salary 518,000 

Mandatory Fringe Benefits @ 17°/ = 3,060 521,060 

This position is responsible for providing expert advice regarding selection of complex 
HTV antiretro viral regiments and interpretation of resistance studies; will also assist in 
adherence strategies and addressing adverse drug reactions and potential drug 
interactions; will have knowledge of HTV treatments and interaction with related 
conditions e.g. transgender issues, psychiatric disease, substance abuse. 

6. 0.15 Administrative Assistant: Mariann F.erretti 
Annual Salary S 5,462 

Mandatory Fringe Benefits© 17.00% = 51,256 56,718 

This position is responsible for assisting in the set up of a database using the UCSF 
STOR system and the REGGIE system to track clients referred for adherence to the 
TA/PA and to collect CD4 and viral load data to enable the reporting of clinical health 
outcomes. 

7. 0.10 Registered Dietician; vacant 
Annual Salary 57,308 

Mandatory Fringe Benefits @ 17% = 51,680 55,988 

This position is responsible for nutrition assessment and counseling (desired weight loss, 
wasting, diabetes, hyperlipidemia, hypertension), body composition analysis, and 
wellness counseling (smoking cessation, stress management, etc). Will also screen charts 
for clients that should be assessed. Will spend 1 hour on initial evaluations and 30 
minutes on follow-up evaluations. 

8. 0,03 Practice Director: Malcolm John, MD, MPH 
Annual Salary 53,450 

Mandatory Fringe Benefits @ 17% = S586 54,036 

This position is responsible for the overall clinical and administrative management of the 
PositiveHealfh practice at UCSF, This position will be responsible for the final review 
and approval of all MOCP clinical and operative protocols generated by the MOCP 
Coordinator and staff; will ensure that the activities of the MOCP are in compliance with 
the regulations of UCSF Medical Center, will ensure the smooth 'integration of the 
MOCP into the general organizational structure of PHP-UCSF. This position will also 
work closely with MOCP Coordinator to facilitate establishment of collaborative 
relationship with the BCA and its Executive Director. 

Total Salaries . ( 5115,474 

Total Frinee 520,396 



79 



Attachment 1 1 
Page 11 of 11 

TOTAL PERSONNEL: 5135,870 

D. equipment' SO 

E MATERIALS AND SUPPLIES SO 

1 . Office Supplies $2900 
Funds are requested to purchase office supplies necessary to implement program. 
Such supplies include: fliers/brochures, posters, culturally relevant health-related 
literature for clients, appointment cards, easels, markers, and paper pads. 

2. Staff Utilities • $1,869 
Funds are requested to purchase a pager and phone for the TA/PA and Case 
Manager given the nature of their duties and their shared time at PHP-UCSF and 
BCA. Prior experience has demonstrated that such immediate access to these 
persons a necessary to deal with urgent client-related issues that arise. 

3. Share Overhead Expenses 54,825 
Funds are requested to cover the room fees for the services provided through 
MOCP that are not already covered by PHP-UCSF. This includes space for the 
TA/PA, Cass Manger, and Dietician. 

TOTAL MATERIAL AND SUPPLIES : S9.594 

F. CONTRACTUAL 

TOTAL CONTRACTUAL: SO 

G. OTHER 

TOTAL OTHER EXPENSES: ... $0 

TOTAL DIRECT EXPENSES: $145,464 

H. INDIRECT COSTS (9% of total modified direct costs) $13,092 

TOTAL BUDGET: $158,556 



TOTAL P.2S 

80 



Attachment III 
Page I of 2 

San Francisco Department of Public Health (SFDPH) 

AIDS Office 

HIV Health Services Section 

HIV CARE AND RELATED SERVICES FOR WOMEN AND MINORITIES 

BUDGET JUSTIFICATION 

(September 30, 2001 - September 29, 2002 with extension to December 31, 2002) 



A. PERSONNEL 

B. MANDATORY FRINGE 

1. 0.30 Director, HIV Health Services; M. Dixon, MPH 
Annual Salary $26,826 

Mandatory Fringe Benefits @ 25.00% = $6,706 $33,532 

This position is responsible for the management, planning, and day-to-day operations of 
SFDPH HIV Health Services. The Director oversees the activities of and provides 
direction to the overall Program including reviewing contract status, progress and 
monitoring reports, budget requests and other administrative functions. 

2. 0.40 Health Program Coordinator III: J. Cecere 
Annual Salary $27,426 

Mandatory Fringe Benefits @ 25.00% = $6,856 $34,282 

This position is responsible for the development and implementation of Program services. 
This position will provide programmatic oversight and monitoring of primary care and 
integrated services programs. Serves as liaison between contractors and SFDPH. 
Performs program monitorings and progress reports, monitoring contractor performance. 

3. COLA/STEP increases; 

The salary expenditures are based on the rates per job classification and Labor Union 
Agreements. The cost for COLA and Step Increases are as follows; COLA @ 3% = 
$2,802 and Step Increases @ 5% = S3, 802 S6,604 

Total Personnel: $74,418 

Total Salaries $60,855 

Total Fringe $13,563 

TOTAL PERSONNEL: 574,418 

C. TRAVEL 

1. Travel: Local $420 

These expenses will be used to purchase bus passes for Health Program Coordinator UI 
to monitor service providers. ($35/month x 12 months). 



81 



Attachment III 
Page 2 of 2 



TOTAL TRAVEL S420 

D. EQUIPMENT SO 

E MATERIALS AND SUPPLIES SO 

F. CONTRACTUAL 

Castro-Mission Health Center 5102,517 
Expanded Access and Coordination of Health Care at Dimensions Clinic 

Dolores Street Community Services $65,850 
HIV Peer Advocacy Program 

Mission Neighborhood Health Center $70,440 
Outreach; HIV Counseling, Testing, &. Referral; and Treatment Advocacy 

San Francisco General Hospital Medical Center $574,825 
Increased Efforts in Adherence, Prevention, & Outreach to the HIV-infected 

UCSF Positive Health Practice (Men) $158,556 
Men of Color Program - Outreach, HIV Treatment & Peer Advocacy 

UCSF Positive Health Practice fWomen) , $46,000 

Women's Specialty Clinic - Outreach, HIV Treatment & Peer Advocacy 

TOTAL CONTRACTUAL: $1,018,188 

G. OTHER $0 

TOTAL DIRECT EXPENSES: $1,093,026 

H. INDIRECT COSTS (1 6% of total modified direct costs) $11,974 

TOTAL BUDGET: $1,105,000 



82 



Attachment IV 

Number: Pa 9 e 1 of z 

Provided by Clerk of Board of Supervisors) 

Grant Information Form 

(Effective January 2000) 

)Ose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
;nd grant funds. 

following describes the grant referred to in the accompanying resolution: 

Grant Title: HIV Care and Related Services for Women and Minorities 

Department: Public Health, AIDS Office, HIV Health Services 

Contact Person: Michelle Long Dixon Telephone: 554-9043 

Brant Approval Status (check one): 

[x] Approved by funding agency [ ] Not yet approved 

\mount of Grant Funding Approved or Applied for: $650,000 

Matching Funds Required: None 

Source(s) of matching funds (if applicable): N/A 

Grant Source Agency: Department of Health and Human Services, Office of Minority Health 
Grant Pass-Through Agency (if applicable): N/A 

Proposed Grant Project Summary: The goal of this project is to improve health outcomes for women and 
orities by increasing access to health care and eliminating disparities in access to care. This project will 
ate a network of community based organizations, SFDPH programs, and university-based programs. . 
ticipatory agencies were selected for their history and expertise at reaching and serving the target 
(ulations. The populations targeted for this project are minority women, transgender individuals, youth, 
can American men, and monolingual Latinos. 

Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: September 30, 2002 End-Date: September 29, 2003 

Number of new positions created and funded: None 

If new positions are created, explain the disposition of employees once the grant ends? N/A 

i. Amount budgeted for contractual services: $562,035 • 

i. Will contractual services be put out to bid? No 

;. If so, will contract services help to further the goals of the department's MBE/WBE 
requirements? N/A 

I. Is this likely to be a one-time (OTF) or ongoing request for contracting out? OTF 

' . Does the budget include indirect costs? [ X ] Yes [ ] No 

83 



Attachment IV 
Page Z of 2 
b1. If yes, how much? $12,133 

b2. How was the amount calculated? 16% of total modified direct costs 

c. If no, why are indirect costs not included? N/A 

[ ] Not allowed by granting agency [ ] To maximize use of grant funds oh direct services 

[ ] Other (please explain): 

14. Any other significant grant requirements or comments: No 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[x ] Existing Site(s) [x ] Existing Structure(s) [ x] Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ ] Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

[ ] New Site(s) [ ] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer 



. v^, yjx 



Norman Nickens 
Date Reviewed: // ~lf- o^- 



Department Approval: 







Mitchell Katz, M.D. / ^-— \ Director of Public Health 



84 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



Item 7 -File 02-2051 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Department of Public Health (DPH) 

Resolution endorsing the transfer of State General Fund 
monies to the California Mental Health Directors 
Association for a contract to provide services to foster care 
and other Medi-Cal eligible children placed outside of San 
Francisco, for the period of July 1, 2002 through June 30, 
2003. 

$50,000 

State of California General Fund 

The DPH currently participates in a Statewide contract 
for the provision of mental health services to San 
Francisco children who are either (a) placed by the City's 
Department of Human Services (DHS) in foster care 
f acuities located outside of San Francisco or (b) are 
adopted by families residing outside of San Francisco. 
The California Mental Health Directors Association 
(Association), a nonprofit organization comprised of 
county mental health directors Statewide, contracts with 
the Statewide Administrative Services Organization 
(ASO) Value Options, a private behavioral health 
organization, to provide mental health referral services 
for San Francisco children who are either placed by DHS 
in out-of-county foster care faculties or are adopted by 
families residing outside of San Francisco. 

Under the contract between the Association and Value 
Options, Value Options pays the mental health providers 
directly for the mental health services provided to eligible 
foster care children and adopted children, and receives 
reimbursement from the Association for payments made 
to the providers and for the administrative fees of Value 
Options. 

Under the proposed resolution, San Francisco's DPH 
would transfer to the Association $50,000 of State 
General Fund monies previously allocated by the State to 
San Francisco to pay for applicable mental health services 
to be provided in Fiscal Year 2002-2003 for eligible San 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

85 



Memo to Finance Committee 

January 15, 2003 Finance Committee Meeting 



Comment: 



Francisco children. According to Dr. Albert Eng of the 
DPH, the DPH, and not the State, determines the amount 
of State General Fund monies to be transferred to the 
Association, based on the anticipated number of children 
to receive services during each fiscal year. 

According to Ms. Sai-Ling Chan-Sew of the DPH, the 
DPH estimates that the proposed transfer of $50,000 in 
State General Fund monies to the California Mental 
Health Directors Association represents 50 percent of the 
estimated $100,000 of expenditures needed to cover the 
costs of the mental health services to be provided. In 
addition, according to Ms. Chan Sew, San Francisco was 
eligible to receive an estimated $50,000 in Federal 
matching funds from the Federal Centers for Medicaid 
and Medicare Services in FY 2002-2003 for total funding 
of $100,000. According to Ms. Chan-Sew, the $50,000 in 
Federal matching funds, also to be paid by DPH to the 
Association, was previously approved by the Board of 
Supervisors in DPH's FY 2002-2003 budget. 

According to Dr. Eng, the purpose of transferring the 
subject State funds in the amount of $50,000, together 
with the Federal matching funds in the amount of 
$50,000, or a total of $100,000, from the DPH to the 
California Mental Health Directors Association, is to 
facilitate access to mental health services for eligible San 
Francisco children bj r utilizing the Statewide 
Administrative Services Organization referral program. 



Recommendations: Approve the proposed resolution. 



cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 




[arvey M. Rose 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

86 



CITY AM) COUNTY 




[Budget Analyst Report] 
of san n Susan Horn 

Main Library-Govt. Doc. Section 



;board of supervisors 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



TO: 



'Finance Committee 



FROM: .Budget Analyst 

SUBJECT: January 22, 2002' Finance Committee Meeting 

Item 1 - Files 02-1219 



January 16, 2002 

DOCUMENTS DEPT. 
JAN 2 8 2003 

SAN FRANCISCO 
PUBLIC LIBRARY 



Note: At the November 26, 2002 Finance Committee Meeting, an Amendment of 
the Whole for File 02-1219 was submitted to the Finance Committee and the 
item was continued to the January 15, 2003 meeting pending submission by 
the Treasurer/Tax Collector of a supplemental appropriation ordinance to 
implement the Business Tax Penalty Amnesty Program (see companion Item 
2 File 02-2029). Both items were then continued at the January 15, 2003 
Finance Committee Meeting. 



Department: 
Item: 



Description: 



Treasurer/Tax Collector 

Ordinance amending the Business and Tax Regulations 
Code to: (1) amend Article 6 Sections 6.17-1 through 6.17- 
4 to increase penalties imposed upon businesses who fail 
to: (a) pay the Payroll Tax or the Gross Receipts Tax owed 
to the City, or (b) file a business tax return or who file a 
business tax return subsequent to the City's due dates, 
and (2) amend Article 17 Sections 1700 through 1707 to 
establish a Business Tax Penalty Amnesty Program 
during Fiscal Year 2002-2003 for penalties owed to the 
City on delinquent annual Business Registration 
Certificate fees and on delinquent Payroll Tax and Gross 
Receipts Tax for tax periods ending on or before December 
31, 2001. 

Prior to January 1, 2000, firms doing business in the City 
were required to pay the City either the Payroll Tax or 
the Gross Receipts Tax, whichever was higher, as an 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



excise tax for engaging in business in the City. The City 
currently imposes only the Payroll Tax on firms engaged 
in business in the City since the Gross Receipts Tax was 
repealed on January 1, 2000 (Ordinance No. 63-01). The 
proposed ordinance would apply to penalties on both the 
Payroll Tax and the Gross Receipts Tax, depending on the 
tax periods for which the penalty applies. 

In addition to paying business taxes, firms engaging in 
business in the City must obtain an annual Business 
Registration Certificate from the Office of the 
Treasurer/Tax Collector's Office. Business Registration 
Certificate fees and business taxes are remitted to the 
City's General Fund. Businesses that (a) fail to obtain an 
annual Business Registration Certificate or fail to obtain 
their Business Registration Certificate by the Certificate's 
due date, (b) fail to file a business tax return or file such 
returns subsequent to the City's due dates, or (c) fail to 
pay their business taxes owed to the City, are subject to 
penalties as set forth in Article 6 Sections 6.17-1 through 
6.17-4 of the Business and Tax Regulations Code. 

The proposed ordinance would amend the Business and 
Tax Regulations Code as follows: 

• Amend Section 6.17-1 to increase the penalty for 
failure to pay the required business taxes. Under 
current law, businesses are subject to penalties of 5% 
of the amount of the delinquent taxes for each month 
or fraction of the month from the time the tax becomes 
delinquent until paid, not to exceed 20% in the 
aggregate. Under the proposed ordinance, the not-to- 
exceed penalty would increase from 20% of the amount 
of delinquent taxes to 25% of the amount of the 
delinquent taxes. In addition, the proposed ordinance 
would amend Section 6.17-1 to increase the additional 
penalty for failure to pay any business taxes for a 
period of 90 days after notification by the Tax 
Collector's Office that the tax is delinquent, from the 
current flat penalty of 20% of the amount of the 
delinquent taxes to a flat penalty of 25% of the amount 
of the delinquent taxes. 

• Amend Section 6.17-2 to increase the penalty for 
underreported business taxes. Under current law, 
businesses are subject to penalties of 5% of the amount 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



of the underreported tax for each month or fraction of 
the month from the time the tax becomes delinquent 
until paid, not to exceed 20% in the aggregate. Under 
the proposed ordinance, the not-to-exceed penalty 
would increase from 20% of the amount of delinquent 
taxes to 25% of the amount of the delinquent taxes. 

• Amend Section 6.17-3 to increase the penalty for 
failure to file a business tax return that is required by 
the Business and Tax Regulations Code from the 
current penalty of $100 to $250 for each such failure to 
file. 

• Amend Section 6.17-4 to add a provision stating that, 
during the proposed amnesty period (see below), for 
any business that applies for and receives a waiver of 
penalties under the proposed Business Tax Penalty 
Amnesty Program, the Tax Collector may not waive or 
otherwise reduce interest for the period or periods 
covered by the business' amnesty application. Under 
the current and proposed amended Business and Tax 
Regulations Code, interest accrues at the rate of one 
percent per month, or fraction of a month, from the 
date that business taxes become delinquent. 

• Amend Article 17 to establish a Business Tax Penalty 
Amnesty Program in Fiscal Year 2002-2003. Under the 
proposed ordinance, the Tax Collector would designate 
by February 1, 2003 a 60-day amnesty application 
period to begin on or after March 1, 2003 and to 
conclude on or before June 30, 2003, during which 
time the Tax Collector would accept applications to 
participate in the Business Tax Penalty Amnesty 
Program for Fiscal Year 2002-2003. According to Mr. 
George Putris of the Treasurer/Tax Collector's Office 
the last such Business Tax Penalty Amnesty Program 
approved by the Board of Supervisors was in FY 1994- 
1995. 

• Adds Section 1700.5 to include a Statement of Intent 
regarding future Business Tax Penalty Amnesty 
Programs to state that it is the intent of the Board of 
Supervisors that future amnesty programs could not 
take place for at least five years following the 
conclusion of the proposed amnesty period. 

Liabilities that would be forgiven under the proposed 
Business Tax Penalty Amnesty Program as set forth in 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



the proposed amended Article 17 of the Business and Tax 
Regulations Code include penalties owed for failure to pay 
annual Business Registration Certificate fees, penalties 
owed for failure to file a business tax return or for filing 
late, and penalties owed for failure to pay business taxes 
for tax periods ending on or before December 31, 2001. 
According to Mr. Dorji Roberts of the City Attorney's 
Office, under the proposed ordinance, a penalty for failure 
to file a business tax return on a timely basis, resulting in 
any loss or partial loss of eligibility for the Small Business 
Exemption would be deemed a penalty subject to waiver 
under the proposed Business Tax Amnesty Program. 1 

Liabilities that would not be forgiven under the proposed 
Business Tax Penalty Amnesty Program include unpaid 
Business Registration Certificate fees, unpaid business 
taxes, accrued interest on delinquent taxes, penalties 
owed as a result of a jeopardy determination 2 that has 
become final prior to the 60-day amnesty application 
period, penalties paid prior to the amnesty period, and 
penalties owed which are related to any determination 
under administrative review, or penalties owed that are 
included in any civil tax collection litigation commenced 
by the Tax Collector, prior to the 60-day amnesty 
application period. 

To qualify for the Business Tax Penalty Amnesty 
Program, a business must: (a) file completed business tax 
returns for all periods for which the business has not 
previously filed a business tax return or not filed an 
amended business tax return for all periods for which the 
business underreported taxes owed to the City, (b) pay in 
full all business taxes and interest due to the City, and (c) 
execute a written waiver of the business' rights to seek a 
refund of the amounts paid to the Tax Collector for all 
periods for which the business submits a tax penalty 



1 According to Mr. Roberts, if a business owes $2,500 or less in payroll taxes to the City and files a 
timely business tax return, then the business is exempt from payment of the tax under the Small 
Business Exemption. If a business fails to file a business tax return on time, even though the 
business owes $2,500 or less in payroll taxes, the business would still be subject to penalties. 
Depending on the year at issue, the business would either lose its Small Business Exemption status 
entirely, or be subject to a graduated penalty according to Mr. Roberts. Such penalties would be 
subject to waiver under the proposed Business Tax Penalty Amnesty Program. 

2 Mr. Mark Buckley of the Treasurer/Tax Collector's Office explains that a jeopardy determination is 
when the timeline for payment of taxes is expedited due to the potential flight risk of the taxpayer. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

4 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 

amnesty application under the proposed Business Tax 
Penalty Amnesty Program. The proposed ordinance 
requires that when a business qualifies to participate in 
the proposed Business Tax Penalty Amnesty Program, 
and that business enters into an installment payment 
agreement with the City to repay in full over time its 
delinquent business taxes, related interest, and/or fees, 
then the business must pay upfront 50 percent of the 
outstanding balance due to the City. 

If a business qualifies to participate in the Business Tax 
Penalty Amnesty Program, the Tax Collector shall: (a) 
waive all penalties for failure to pay annual Business 
Registration Certificate fees or failure to file a business 
tax return, (b) waive all penalties for delinquent business 
taxes, (c) refrain from initiating proceedings to suspend or 
revoke the Business Registration Certificate previously 
issued to the business, and (d) refrain from initiating any 
civil action against the business for the tax periods for 
which the tax penalty amnesty is granted. 

Comments: 1. The Attachment is a memorandum from Mr. Putris 

showing the results of the last 1995 Amnesty Program. 
According to Mr. Putris, the 1995 Business Tax Penalty 
Amnesty Program was effective from December 1, 1994 to 
January 31, 1995. The Attachment shows that as a result 
of the 1995 Business Tax Penalty Amnesty Program, the 
City realized $4,949,336 in delinquent Business 
Registration Certificate fees and business taxes offset by 
additional City costs of $770,952, for a net revenue gain to 
the City of $4,178,384. Mr. Putris reports in the 
Attachment that "the aggregate amount of penalties 
waived in connection with the 1995 Amnesty Program 
were not recorded at the time and cannot easily be 
determined now." The Treasurer/Tax Collector's Office 
has no information on the amount of revenue forgone by 
the City under the 1995 Amnesty Program, representing 
penalties on the delinquent taxes and Business 
Registration Certificate fees. 

2. Mr. Putris states in the Attachment, "If all delinquent 
taxpayers with collectable accounts availed themselves of 
the proposed Business Tax Penalty Amnesty Program, the 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



total amount of outstanding penalties subject to 
forgiveness would be $12,466,561." 

3. The Treasurer/Tax Collector's Office is requesting a 
supplemental appropriation (see Item 2, File 02-2029) of 
$998,992 for FY 2002-03 to cover the costs of staff time 
and related costs that would be required to process 
applications for the Business Tax Penalty Amnesty 
Program should this proposed ordinance (File 02-1219) be 
approved by the Board of Supervisors. Mr. Putris advises 
that the supplemental appropriation request of $998,992 
is the amount of additional funds that the Treasurer/Tax 
Collector's Office would require if the applications to 
participate in the proposed Business Tax Penalty 
Amnesty Program were to be accepted for a 60-day period. 
According to Ms. Peg Stevenson of the Controller's Office, 
the Controller's Office is only able to certify $297,498 in 
increased business tax revenues to pay for the requested 
supplemental appropriation of $998,992. Ms. Stevenson 
advises that the amount of $297,498 represents the 
estimated amount at this time which the Controller 
believes would be realized by the City as a result of the 
proposed Business Tax Penalty Amnesty Program. 

4. As previously noted, an increase in penalties would be 
imposed on businesses (a) which fail to pay business taxes 
owed to the City, from the current not-to-exceed penalty 
of 20% of the amount of taxes owed to a proposed not-to- 
exceed penalty of 25% of the amount of taxes owed, or (b) 
which fail to file a business tax return, whereby the 
current penalty of $100 would be increased to a penalty of 
$250. Mr. Putris advises that the Treasurer/Tax 
Collector's Office is unable to estimate the additional 
revenues to the City which would result from the 
increased penalties under the proposed ordinance. 

5. The Budget Analyst notes that while business tax 
collections may increase during the amnesty period, much 
of that revenue might be collected without an amnesty 
program, simply as a result of the Tax Collector's normal 
auditing and collection procedures. The Attachment 
includes a flow chart of the business tax filing and 
collection process. As previously noted, the Treasurer/Tax 
Collector's Office has no information on the forgone 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

6 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 

revenues to the City from the 1995 amnesty program. As 
also previously noted, Mr. Putris estimates that the 
amount of penalty revenues which may be forgone by the 
City if the proposed Business Tax Penalty Amnesty 
Program is approved by the Board of Supervisors is 
$12,466,561. 

6. Although, at this time, the Controller is only able to 
certify $297,498 in additional increased revenue which 
may result from the proposed Business Tax Penalty 
Amnesty Program, it is possible that additional revenues 
would be realized by the City. Further, such a Program 
could result in improved compliance with the City's 
business tax laws and could result in an increase to the 
City's business tax base if the number of currently 
unregistered businesses use the amnesty program to 
become registered with the City. The potential for an 
increased number of registered businesses could therefore 
be viewed as a long term revenue benefit resulting from 
the proposed Business Tax Penalty Amnesty Program. 

Recommendation: Approval of the proposed ordinance is a policy decision for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

7 



SUSAN LEAL 
Treasurer 



DATE: 

TO: 

FROM: 

SUBJECT: 

CC: 



Office of the Treasurer & Tax Collector 
City and County of San Francisco 

Street Address: 1 Dr. Carlton B. Goodlett Place, City Hall, RoomHO 

San Francisco, CA 94102 

Mailing Address: P.O. Box 7425, San Francisco, CA 94120-7425 



Original: September 25, 2002; Updated: January 9, 2003 

Anna LaForte 

George Putris, Tax Administrator 

Proposed Business Tax Penalty Amnesty Program 

Hon. Susan Leal, Treasurer/Tax Collector 



Page 1 of 



GEORGE PUTRIS 
Tax Administrator 



We have considered your questions concerning the proposed Business Tax Penalty Amnesty 
Program and respond as follows: 

1. Program Costs 

Set forth below is an estimated budget for the proposed Business Tax Penalty Amnesty 
Program. This budget relies upon the actual costs incurred during the fiscal year 1994/1995 
Amnesty Program. 

Assumptions: 

■ Inflation rate at 20 percent for programming and materials. Employee compensation set forth 
at current rates. 

1 Total number of businesses participating in the proposed amnesty program same as in the 
prior program; that is, approximately 10,000 applicants, of which 4,500 ultimately required to 
pay delinquent tax obligations. 

■ Additional staff will be needed for a six-month period to complete the processing of 
applications and payment arrangements. 



Temporary Positions 


Cost 


FTE 


Annual 


4222 Sr. Auditor 


537,284 


.5 


74,568 


4220 Auditor 


$128,856 


2 


64,428 


4308 Collections Officer 


$115,492 


2 


57,746 


1632 Sr. Acct Clerk 


5103,480 


2 


51,740 


1630 Acct Clerk 


$89,388 


2 


44,694 


1424 Clerk Typist 


$43,316 


1 


43,316 










FTE Total 


$517,816 


9.5 




Benefits 


$40,000 






Overhead 









Advertising 


$30,000 






Materials, Supplies, Mailing & Programming 


5411,176 






Total 


$998,992. 







Attachment 
Page 2 of 4 



2. Supplemental Appropriation Required 

The Treasurer's Office has not included the above-estimated costs in its fiscal year 
2002/2003 budget. Therefore, supplemental appropriations equal to the entire program costs 
would be required. 

3. Aggregate Penalties Subject to Forgiveness Under Proposed Amnesty Program 

If all delinquent taxpayers with collectable accounts availed themselves of the proposed 
Business Tax Penalty Amnesty Program, the total amount of outstanding penalties subject to 
forgiveness would be 512,466,561. 

The total amount collected during the fiscal year 1994/1995 Amnesty Program was 
54,949,336. The total cost of administering such Program was 5770,952, of which $249,162 was 
for materials, supplies and programming. The aggregate amount of penalties waived in 
connection with such Program were not recorded at the time and cannot easily be determined 
now. 

4. Delinquent Revenue Collection Process 

The department's Bureau of Delinquent Revenue ("BDR") is primarily responsible for 
identifying and collecting delinquent business tax revenues due and owing to the City and 
County of San Francisco. A summary of BDR's procedures are set forth below: 

■ Delinquent accounts are identified using "on-hold" reports generated daily from DTIS. This 
report reflects registered businesses that have made a payment but, due to a prior year's 
delinquency, have a "hold" on the issuance of a new registration certificate. 

■ For delinquent accounts, collectors research and compile all taxes, including business taxes 
and unsecured property taxes (UPP), and send a statement of account to the taxpayer. 

■ Taxpayers contact the office to pay, dispute or clarify the account. If payment in full is 
received, the registration will issue automatically by the Business Tax System ("BTS"). If the 
taxpayer disputes the liability and requests a waiver of penalties, the matter is forwarded to 
Business Tax Section. If the taxpayer sends documentation to substantiate the basis of the 
dispute (e.g., the business closed a year ago), then an adjustment request is forwarded to the 
Taxpayer Assistance or Business Tax Section. 

• If the taxpayer fails to respond, a second letter is sent. If no response is received, then the 
account is forwarded to Investigations for further action and possibly the recordation of a 
lien. If the amount is under $5,000, the business tax summary judgments procedure maybe 
used. If the amount is over $5,000, the account is forwarded to Legal Section to review for 
possible legal action. 



Page 3 of 4 



■ Separate from this process, collectors work to proactively identify businesses who are 
delinquent in tax payments in excess of those identified in the "on-hold" report. The 
following means are used: 

i. Cross referencing taxpayer accounts in the BTS and various lists of delinquent 

UPP taxes and other files and list provided by third parties, including Dunn and 
Bradstreet, the Franchise Tax Board, and the State Board of Equalization. This 
cross-checking procedure typically yields the identities of large numbers of 
unregistered businesses. 

ii. Search of the BTS system for large delinquent obligations to collect (also known 
as "cherry picking"). 

iii. Identification of unregistered companies and individuals doing business in the 

City and County of San Francisco using the Internet, periodicals, newspapers, etc. 

The chart attached to this Memorandum provides an overview ofBDR 's collection process. The 
chart outlines procedures associated with the non-payment of business taxes over time and 
reflects the categories of businesses who would be eligible for a new Amnesty Program. 

5. Long Term Results of Prior Amnesty Program 

It is reasonable to assume that some number of unregistered businesses that availed 
themselves of the prior amnesty program paid past and future taxes that would not have been 
collected but for such program. Some of these businesses would probably have been identified by 
BDR. in the ordinary course of business; therefore, it is possible that the prior amnesty program 
reduced post-amnesty collections. Stated another way, the amnesty program, by accelerating 
collections to the amnesty period, reduced later collections by a like amount. 

6. Policy Implications Of Amnesty Programs 

The reduction of the number of non-compliant businesses eases BDR's burden of 
discovering and collecting delinquent tax obligations. In addition, amnesty serves to accelerate 
the collection of past due tax obligations. 

Two unintended effects of amnesty program are as follows: 

■ Some of the taxpayers who havediligently complied^ with the City and County 
of San Francisco's various taxation laws or have actually paid the types of 
penalties forgiven under amnesty programs take exception to what they 
consider the special treatment that non-compliant businesses receive under 
such programs. 

■ In the taxable years following an amnesty program, some non-compliant 
businesses who incur penalties choose not to come forward, choosing instead 
to wait for a future amnesty program. 



10 



Page 4 of 4 

Business Tax Filing & Collection Process 



3 



3 



AIL BUSINESSES 



REGISTERED 



Businesses who 

file returns and pay 

obligation, if any. 



Businesses who 
do ;ot file returns. 



t 

AUDITS 
A percentage 
of these filers 
--isrer'audited;' 




DETERMINATION ISSUED. 

TTX estimates tax amount due, 

penalties, interest and fees, and 

notifies taxpayer. 



DETERMINATION" FINAL, 

if no payment or protest Subject io 

collection by BDR. 



Additional penalties accrue. 



NOT REGISTERED 



Businesses who 

file returns, and have 

unpaid balance. 



LATE STATUS 

Subject to penalties 

and interest 



DELINQUENT STATUS 

Subject to penalties and 

interest 



11 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 

Item 2 - 02-2029 



Note: This item was continued at the January 15, 2003 Finance Committee 
Meeting. 



Department: 
Item: 



Amount: 
Source of Funds: 
Description: 



Treasurer/Tax Collector 

Ordinance appropriating $998,992 from the General Fund 
Reserve to the Office of the Treasurer/Tax Collector for 
the purpose of implementing a Business Tax Penalty 
Amnesty Program during fiscal year 2002-2003, and 
placing $701,494 on reserve. 

$998,992 

Business Tax Revenue (see Comment No. 4). 

The Treasurer/Tax Collector is requesting a supplemental 
appropriation in the amount of $998,992 from the General 
Fund Reserve to implement a Business Tax Penalty 
Amnesty Program in FY 2002-2003 as described in Item 
1, File 02-1219. 



Budget: 



According to Mr. George Putris of the Treasurer/Tax 
Collector's Office, for the six month period from 
approximately March 1, 2003 through approximately 
August 31, 2003, the cost to implement the Business Tax 
Penalty Amnesty Program would be $998,992 as follows: 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

12 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



Description 


Requested 
Appropriation 


Appropriated and 
Unreserved Amount 


Reserved Amount 

of Total Requested 

Appropriation 


Temporary Salaries & 
Fringe Benefits 


$565,992 


5141,498 


5424,494 


Official Advertising 


30,000 


30,000 


- 


Materials and Supplies 


45,000 


18,000 


27,000 


Forms 


3,000 


3,000 


- 


Professional & 
Specialized Services 


60,000 


40,000 


20,000 


Services of Other 
Departments - DTIS 
Programming 


260,000 


30,000 


230,000 


Services of Other 
Departments - DTIS 
Telephone 


5,000 


5,000 




Services of Other 
Departments - Mail 


20,000 


20.000 




Services of Other 

Departments 

Reproduction 


10.000 


10.000 




Total Program Cost 


5998,992 


5297,498 


5701,494 



Comments: 



Attachment I, is a memorandum provided by Mr. Putris, 
which provides additional budgetary and programmatic 
details. 

1. In Attachment I, Mr. Putris identifies reserved funds 
of $648,362 instead of the Controller's recommended 
reserve of $701,454, as shown in the table above. 
According to Ms. Pamela Levin of the Controller's Office, 
the Controller continues to recommend reserved funds of 
$701,494 (see Comment No. 4). 

2. The Budget Analyst has reviewed the Controller's 
latest FY 2002-2003 expenditure projections for the 
Treasurer/Tax Collector's Office, based on salary and 
mandatory fringe benefit expenditures through the pay 
period ending December 20, 2002. Using fiscal year-to- 
date average pay period expenditures, to project salary 
and fringe benefit spending for the remainder of the fiscal 
year, results in a projected year-end surplus of $223,843. 
However, when basing the projection on the latest pay 
period expenditures, the Treasurer/Tax Collector's year 
end projection results in a deficit of $124,569. This 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



difference in projections is due to recent hiring of 
temporary personnel to process Property Tax payments, 
the first installment of which was due December 10, 2002. 

In Attachment II, Mr. Jay Banfield of the Treasurer/Tax 
Collector's Office explains that as a result of the increased 
spending on seasonal, temporary personnel, the 
Department will not have a surplus which can be used as 
a source of funds for this proposed supplemental 
appropriation but that the Department will end the fiscal 
year with a balanced budget. 

3. Ms. Shana Margolis of the Treasurer/Tax Collector's 
Office states in Attachment I that, "It is impossible to 
project the amount of revenue that will be generated with 
a new Amnesty Program. The revenue generated from the 
program will be dependent on the level of participation in 
the program from the business community." However, Mr. 
Banfield advises that the Tax Collector's records indicate 
that there is currently $31.8 million of delinquent 
business taxes, excluding penalties, that would be eligible 
for collection during the proposed Amnesty Program. Mr. 
Banfield states that during the FY 1994-1995 Amnesty 
Program, the records indicate that there was $12.9 
million of delinquent business taxes, excluding penalties, 
that was eligible for collection and the total amount 
collected during this previous Amnesty Program was 
$4,949,336. 

4. According to Ms. Levin, out of the total requested 
amount of $998,992, at this time, the Controller's Office is 
only able to certify $297,498 in increased business tax 
revenues that might result from the implementation of 
the Business Tax Penalty Amnesty Program, to serve as a 
funding source for the subject supplemental 
appropriation. Therefore, the Controller's Office has 
placed the balance of this request or $701,494 on reserve 
pending the submission of a report by the Treasurer/Tax 
Collector to the Controller's Office, which would provide 
information demonstrating that sufficient revenue would 
be generated by the Business Tax Penalty Amnesty 
Program, according to Ms. Levin. Mr. Putris states that 
such a report, which would be submitted to the 
Controller's Office approximately one month after the 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

14 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



Program begins, would consist of 1) the number of 
responses to the program, 2) the total number of 
applicants for the Business Tax Penalty Amnesty 
Program, 3) the actual amount of Business Tax revenues 
collected to date, 4) projected total Business Tax revenue 
collections, and 5) the total amount of Business Tax 
Liability reflected in the Tax Collector's record for all 
applicants to the Business Tax Penalty Amnesty 
Program. According to Ms. Levin, additional reports 
demonstrating appropriate business tax revenue levels 
may be required from the Treasurer/Tax Collector in 
order for the Controller to release the reserved funds. The 
Budget Analyst further recommends that the 
Treasurer/Tax Collector submit all such reports to the 
Finance Committee of the Board of Supervisors. 

5. Ms. Levin states that the Controller will submit an 
Amendment of the Whole to the Finance Committee 
designating the source of funds for the entire $998,992 as 
new Business Tax Revenues, instead of appropriating 
,992 from the General Fund Reserve. 



6. According to Ms. Levin, the subject $701,494 in 
reserved funds are subject to release by the Controller's 
Office but are not subject to release by the Board of 
Supervisors. The Finance Committee may wish to amend 
the proposed ordinance to require approval by the 
Finance Committee of the Board of Supervisors prior to 
the release of the $701,494 in reserved funds. 

Recommendations: 1. Amend the proposed ordinance to require that the 

Treasurer/Tax Collector submit to the Finance Committee 
all reports prepared to provide information demonstrating 
that sufficient Business Tax revenue would be generated 
by the Business Tax Penalty Amnesty Program to fully 
fund the cost of the Program. 

2. Approval of the proposed ordinance, as amended, is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

15 



Attachment 




Office of the Treasurer 

& Tax Collector 

City and County of San Francisco 

City Hall, Room 140 ^X^S""^ 

#1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102 ^i£_j__--' 

SUSAN LEAL, Treasurer 

MEMORANDUM 

TO: Leanne Nairn 

CC: Susan Leal 

FROM: Shana Margolis 

DATE: January 9, 2003 

RE: Proposed Business Tax Amnesty Program Supplemental Appropriation 

Following are responses to your questions regarding the proposed Business Tax 
Penalty Amnesty Program Supplemental Appropriation Request. 

1. Pro gram Summary * 

The proposed Business Tax Amnesty Program would waive all penalties for 
businesses that apply and qualify for the amnesty during the 2-month amnesty period. 
Businesses must pay the principal amount of tax and all interest to qualify. The amnesty 
program would apply to all businesses that: 

(a) Failed to pay the annual business registration fee; 

(b) Failed to file a tax return, pay tax, or underreported tax; and/or 

(c) Paid registration and/or taxes late. 

Following the amnesty period, penalties for delinquent registration and tax filing will 
increase. 

2. Purpose of Supplemental Appropriation Request 

The Office of the Treasurer & Tax Collector currently does not have sufficient staff to 
administer the Tax Amnesty Program without curtailing other collection activities. The 
Office will require additional staff during a 6-month period to prepare and process all 
amnesty applications and payment arrangements. During the previous Amnesty Program 
during fiscal year 1994/1995, the Office processed 10,000 applications at a total cost of 
S770.952. 

3. Services to be Delivered 

The Office will engage in the following tasks and provide the following services: 
• Conduct outreach to the business community, including press releases, advertising 

in newspapers, and attempting to secure donated billboard and other types of 

advertising; 

16 



Attachment I 
Page 2 of 8 



• Preparation and mailing of amnesty application forms and materials; 

• Staffing of the phone bank to respond to amnesty applicant questions; 

• Staffing at counters for walk-in amnesty applicants; 

• Programming the business tax computer system to process the applications; 

• Programming of the on-line portal to provide online riling of amnesty 
applications; 

• Staffing to process and audit amnesty applications and payments. 

4. Anticipated Revenues Resulting from Program 

The total amount collected during the fiscal year 1994/1995 Amnesty Program was 
$4,949,336 as reported by the former Tax Collector Richard Sullivan. It is impossible to 
project the amount of revenue that will be generated with a new Amnesty Program. The 
revenue generated from the program will be dependent on the level of participation in the 
program from the business community. 

5. Description of Supplemental Appropriation Request by Line Item 



Description 


Total Cost 


Initial Cost 


Reserved 


Commentary 


Temporary 
Salaries 


5517,816 


$129,454 


5388,362 


9.5 FTE (actually 19 people for 6 
months). Detail of staff and their duties is 
outlined below. 


Mandatory 

Fringe 

Benefits 


540,000 „,, 


$10,000 


530,000 


Per Controller's Office 


Official 
Advertising 


$30,000 


$30,000 





Newspaper advertising of program. All 
advertising must be done in advance of 
taking applications to ensure a substantial 
number of applicants. The Office will 
attempt to obtain donated billboard and 
other advertising as per the last program. 
For details, see Schedule A attached. 


Materials and 
Supplies 


$70,576 


$70,576 





Purchase of computers, desks and and 
possibly some cubicles for placement in 
temporary offices in City Hall to process 
amnesty applications. For details, see 
Schedule B attached. 


Forms 


$3,000 


$3,000 





Printing of application forms. All forms 
must be created and printed prior to 
commencement. 


Internet Portal 

Programming 


$35,400 


$35,400 





Online application programming. Online 
filing will substantially reduce the staffing 
cost of processing applications. The 
consultant, Ciber, was selected through an 
RFP process hired by DTIS. The RFP 
was issued in Spring 2002 and the 
contract was signed in Summer 2002. 



17 



Attachment I 
Page 3 of 8 











Ciber's costs are estimated at S25,00O. 
DTIS will also incur programming costs 
estimated at 55,000. All portal costs must 
be incurred prior to the commencement of 
the project and are not scalable. For 
details, see Schedule C attached. 


DTIS 
programming 


$260,000 


$30,000 


$230,000 


Work order funds to DTIS. This cost is an 
estimate based on DTIS' programming 
costs to run the prior amnesty program. 
The initial cost assumes manual data entry 
of application forms unless a substantial 
volume requires automation. 


Telephone 
Semes 


58,200 


38,200 





Work order funds to DTIS. Separate 
phone lines for program through DTIS. A 
high volume of calls is expected that will 
overwhelm the current phone system. For 
details, see Schedule D attached. 


Mail Service 


$24,000 


$24,000 





Work order funds to Reproduction. Time 
&. Postage - 3 oz./24,000. ...Mailing of 
notice to known delinquent taxpayers 
must take plac.e prior to start of program. 


Reproduction 
Service 


510,000 


$10,000 





Work order funds to Reproduction. Print 
and fold 24,000 letters 


Total 


5998,992 


S350,630 


S648,362 





6. Reason for Placing Some Money on Reserve 

The estimated cost of the program is 3997,316 as outlined above. Because it is 
unknown how much money the program will actually bring in, the Office of the 
Treasurer & Tax Collector has estimated the minimum amount of money it will take to 
get the program up and running if few businesses apply for the amnesty. These initial 
costs are outlined above and include advertising, phone lines, printing and mailing forms 
and applications, computer and on-line portal programming and 25 percent of the total 
staff time. 

A limited number of staff will begin by focusing on identifying delinquent taxpayers 
and preparing notices, forms and applications. Additional staff members will be utilized 
when the amnesty- filing period begins. These employees will staff the phone bank and 
counters to assist businesses that apply for amnesty. If there is a large response to the 
program, the Office will employ all estimated temporary positions to process such 
applications. Additional programming costs will be incurred to provide for automated 
processing of large quantities of applications. 



7. Detail of Temporary Positions 

Cost FTE 

4222 Sr. Auditor 37,284 .5 

4220 Auditor 128,856 2 

4308 Collections Officer 115,492 2 



Annual 

74,568 
64,428 
57,746 



n i i a u nine n l 

Page 4 of I 



1632 Sr. Account Clerk 103,480 2 51,740 

1630 Account Clerk 89,388 2 44,694 

1424 Clerk Typist 43,316 1 43,316 

Total 5517,816 9.5 

The clerk/typist and account clerk positions will be responsible for manually entering 
in the application data into the Business Tax System. It is assumed that one clerk-typist 
can handle a small volume of applications. However, if a large volume of applications is 
received, it will be necessary to have DTIS program the system to automate the data entry 
as one typist will not be able to handle a large volume. If the system is reprogrammed, 
one clerk-typist position will still be necessary to scan the applications into the system, 
handle exceptions and file documents. 



19 



Attachment I 

SCHEDULE A p age 5 of 8 

BUSINESS T.AX AMNESTY AD COST 

For a 375° wide x 4* deep paragraph 

NEWSPAPER COST (ONE DAY) NO. OF DAYS TOTAL COST 

SAN FRANCISCO INDEPENDENT S573.12 4 S2.2S2.48 

Publishes on Saturdays, Tuesdays and Thursdays only 

SAN FRANCISCO EXAMINER' 51,19520 5 " S5.97S.00 

Publishes Monday thru Friday 

SAN FRANCISCO CHRONICLE 

Publishes eve-yday 

SUNDAY: . 34,400.00 2 S3.SOO.00 

WEEKDAY: S4.264.00 3 S12.732.00 

TOTAL COST $29,850.48 



20 



Attachment I 
Page 6 of 8 



SCHEDULE B 



Breakdown of estimated materials and supplies: 

18 computers (PC and monitors) S1500.00 ea. = S27.000. 
18 Software licenses: 

MS Office Professional @ SSOO ea. (database) 9,000. 

Rumba Office software for system access @ S300 ea. 5,400. 

4 Printers and Toner/paper supplies 5.000. 

CITY HAIL (for an identified pre-wired location) 

Desks 18@S1232.00Ea. S22,l 76. Rounded 

(Any monies left will be applied to cubicle partition 
Setup costs). 



Purchase local Area network hardware switch 2,000. 

TOTAL: $ 70.576. 



IMPORTANT TO NOTE THAT A PRE-WIRED CITY HALL ROOM THAT CAN 
HANDLE 18 COMPUTERS HAS AS OF THIS DATE NOT BEEN IDENTIFIED. 
COSTS MAY INCREASE IF WE GO OUTSIDE CITY HALL. 



21 



Attachment I 
Page 7 of 8 



SCHEDULE C 

BUSINESS TAX AMNESTY ONLINE REGISTRATION 

Overview: 

The Amnesty Registration application would allow businesses (delinquent registrants only) to register 
online for the Business Registration Certificate and to calculate fees associated with late 
registration/filing. 

General description of the application that we envision: 

■ Businesses will submit the registration information online and then print and mail a signature slip 
(which will satisfy the requirement for an original signature). The Tax Amnesty Registration 
application will calculate registration and payroll tax fees/penalties based on the business start 
date and the annual payroll cost 

■ Payment by check will be mailed along with the signature slip or payment will be made online by 
credit card or electronic check (convenience fees may apply). 

■ The registration information will be uploaded to BTS upon receipt of the signature slip and 
payment (if not already paid online). 

Cost: 
Ciber: 

Project Management 40 hours 

Technical Architect 20 hours 

Application Developers/QA Testing 100 hours 

Content Developer/Graphic Artist 20 hours 

Technical Writer 20 hours 

Ciber Cost: 200 hours @ S125/hour = $25,000 

DTJLS: approx. 100 hours BTS programming at $104/hour = 510,400 

TOTAL COST: S35,400 



22 



Attachment I 
Page 8 of 8 

SCHEDULE D 



BREAKDOWN for a telephone system only at an*identified, pre-wired, 

location in City Hall for 18 units: 

Installation Costs: 18-line ACD group: S7,700. (rounded) 
6408 Set for 18 units at S427 set = S7,686.00 

Installation S 300. 

ACD programming S 200. 

TOTAL: S8,200.00 



♦IMPORTANT TO NOTE THAT A PRE-WIRED CITY HALL ROOM THAT 
CAN HANDLE 18 COMPUTERS HAS AS OF THIS DATE NOT BEEN 
IDENTIFIED. COSTS MAY INCREASE IF WE GO OUTSIDE CITY HALL. 



23 



Attachment II 



Office of the Treasurer 

& Tax Collector 

City and County of San Francisco 

City" Hal] , Room 140 

= 1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102 




SUSAN LEAL, Treasurer 

JAYBANFIELD, Chief Assistant Treasurer 
Phone: (415) 554-4478 



January 8, 2003 

Ms. Leanne Nhan 
Budget Analyst's Office 
1390 Market Street, Suite 1025 
San Francisco, CA 94102 

Dear Ms. Nhan, 

You have indicated that the latest expenditure projection from the Controller's Office 
shows a deficit of $124, 569 and a surplus of $223,843 in salary and fringe benefits, 
depending upon the methodology used. 

These projections, by definition, do not account for the office's staffing plan for the 
remainder of the fiscal year. As in prior years, the office will hire seasonal personnel for 
the processing of business tax statements (deadline of February 28, 2003) and property 
tax statements (deadline of April 10, 2003). The Office of the Treasurer & Tax Collector 
will also hire positions authorized by the Board of Supervisors to a dmini ster the Police 
Emergency Alarm ordinance, as well as recently vacated collection and auditing positions 
that generate millions of dollars in tax revenue. 

As a result, the Office of the Treasurer & Tax Collector will end the year with neither a 
deficit nor a surplus in salary and fringe benefits. Our staffing plan will result in salary 
and fringe benefit expenditures equal to our budgeted amount. 

Please feel free to contact me if you would like to discuss this in more detail. 



Sincerely, 



Jay Banfield 



24 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 

Item 3 - Files 02-1876 



Note: This item was continued by the Finance Committee at its 
January 15, 2002. 



meeting of 



Department: 



Item: 



Location: 



Purpose of Lease 
Extension: 



Lessor: 



Lessee: 



Department of Administrative Services, Real Estate Division 

Resolution authorizing the exercise of an extension option 
at 875 Stevenson Street for various City departments. 

875 Stevenson Street: a portion of the first floor, all of the 
second, third, fourth and fifth floors, 25 parking spaces, and 
basement storage space. 



Office space in the amount of 158,442 square feet, as detailed 
in Attachment I to this report, provided by the Real Estate 
Division, for the following City Departments and functions: 
Assessor - Payroll; Controller - Payroll and Personnel; Public 
Administration and Public Guardian -County Veterans 
Service; Department of Public Works (DP\V) - Payroll, 
Accounting, Streets and Mapping; MUNI - Security, MIS and 
Payroll; Reproduction and Mail Services; and, PUC Utilities 
Engineering Bureau, 25 parking spaces and 3,000 square 
feet of basement storage for the Law Library. 

Western Mart Co., L.P. (Western Mart) 



City and County of San Francisco through the Real Estate 

Division 
Term of Lease 
Extension: Five years, commencing on December 1, 2002 and 

terminating on November 30, 2007 (see Comment No. 2). 
Additional 
Right of Renewal: On November 30, 2007, the City would have an option to 

extend the lease for (a) one six month period, and (b) two one 

year periods. 

Monthly and Annual 

Rent Payable by 

the City to 

Western Mart: The monthly rent payable by the City to Western Mart for 

158,442 square feet of office space, 25 parking spaces and 
3,000 square feet of basement storage space at 875 
Stevenson Street, would be $290,477 or $3,485,724 annually 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

25 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



($22.00 per square foot or approximately $1.83 per square 
foot per month based on the 158,442 square feet of office 
space). This proposed rent of $3,485,724 annually would 
remain the same during the entire five year lease extension. 
The existing rent is $218,587 monthly or $2,623,044 
annually ($16.55 per square foot). Therefore, the proposed 
lease extension represents an increase of $862,680 annually 
($71,890 monthly) or 32.9 percent over the existing rent. 



Utilities and 

Janitorial 

Services: 



Comments: 



The City would continue to pay for the costs of electricity, 
janitorial services, and security guards. According to Mr. 
Larry Jacobson of the Real Estate Department, the City 
would pay approximately $1,050,000 annually for electricity, 
DPW custodians, and Building and Grounds Patrol Officers. 
Attachment II to this report, provided by Mr. Jacobson, 
shows the annual budget for these services. 

1. According to Mr. Jacobson, all of the existing City 
department tenants would remain at 875 Stevenson Street, 
with the exception of the PUC Utilities Engineering Bureau 
which will relocate its offices from the third floor (32,000 
square feet) at 875 Stevenson Street to 1155 Market Street 
before March 1, 2003. The Budget Analyst previously 
reported to the Finance Committee for a supplemental 
appropriation ordinance (File 02-1892) approved by the 
Board of Supervisors on November 25, 2002, that the 
Department of Aging and Adult Services (DAAS) will move 
into the third floor at 875 Stevenson Street by August of 
2003.1 



2. Mr. Jacobson advises that the Real Estate Division is 
bringing the subject resolution to the Board of Supervisors, 
after the existing lease expired on November 30, 2002, 
because the City and Western Mart only reached an 
agreement on November 21, 2002. Mr. Jacobson states that 
the City is not renting the space at 875 Stevenson Street on 
a month to month basis but is rather waiting for retroactive 



1 The PUC will pay for the relocation and improvement expenses of the DAAS, which will cost 
$298,000 from funds appropriated in the supplemental appropriation (File 02-1892), and for four of 
the five months (March of 2002 through January of 2003) at the existing rent rate ($759,942 
annually, $63,328.50 monthly), which will cost the PUC $253,314 from funds approved in their FY 
2002-2003 budget. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

26 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 

approval to reimburse Western Mart for December's rent 
payment under the terms of the proposed five year lease 
extension. The proposed resolution should therefore be 
amended to provide for retroactivity. 

3. As explained in Attachment II to this report, Mr. 
Jacobson states that an independent appraiser, David 
Bohegian, determined the prevailing market rental rate at 
875 Stevenson Street to be approximately $1.83 per square 
foot per month ($22.00 per square foot per year), or 
$3,485,724 annually for the 158,448 square feet of office 
space which the City is leasing. Mr. Jacobson states that 
the Real Estate Department agrees that Mr. Bohegian's 
independent appraisal of the market rental rate of the 
property represents fair market value. 

4. According to Mr. Jacobson, the Real Estate Division is in 
the process of negotiating the same rental rate currently 
being charged until the City's projected financial shortfall is 
resolved. Mr. Jacobson states that these negotiations are 
still in process. Mr. Jacobson notes that any delay in paying 
the proposed rent increase of 32.9 percent as was negotiated 
under the proposed resolution, would require the City to pay 
back to the lessor, Western Mart, the difference owed, 
including interest, between the rent to be negotiated and the 
increased rent as was previously negotiated under this 
proposed resolution. 

5. Mr. Jacobson advises that the Real Estate Division will 
request that this subject resolution be continued to the Call 
of the Chair until the negotiations described in Comment No. 
4 above are finalized. 

Recommendations: 1) In accordance with Comment No. 2, amend the subject 
resolution to provide for retroactivity. 

2) As requested by the Real Estate Division, continue the 
proposed resolution to the Call of the Chair. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

27 



875 STEVENSON RENT ALLOCATION 



Attachment I 





BOMA 


Rent Per 


Monthly Annual 


Department 


Area 


Sq. Ft, 


Rent Rent 








Reproduction (1st) 


9,396 


1.83331 17,226 


206,708 
773,462 


DTIS (1st. 5th) 


35,158 


1.8333 


64,455 


Assessor/Recorder (1st) 


9,934 


1.8333 


18,212 


218,544 


Lobby 











Public Administrator (2nd) 


1,030 


1.8333 


1.888 | 


Muni (formerly Pub. Admin. Space) 


12,248 


1.8333 


22,454 


269,451 


Muni (2nd) 


8,873 


1.8333 


16,267 


195,202 


Controller - PPSD (2nd & 3rd) 


13,230 


1.8333 


24,255 


291,055 


PUC (3rd) 


33,146 


1.8333 


60,767 


729,199 


DPW (4th) 33,700 


1.83331 


741,387 


Cafe (4th) 








Storage (1st) 1,727 


1.8333 


3,166 


37,993 


(Storage: Treasurer 50%. Human Ser. 30% 






Retirement 10%, Controller 5% 










Purchaser 5%) 


















Totals 


158,442 


5290,472 


53,485,661 



stevebud 



Attachment II 
Page 1 of 2 

ATTACHMENT #1 RE: File 02-1876 



MEMORANDUM 



DATE : December 4,2002 



TO : Harvey Rose, Budget Analyst 





FROM: Larry Jacobson 

Senior Real Property Officer 



The following items are in response to your office's questions: 



The reason that this resolution is being submitted to the Board of Supervisors 
after December 1, 2002 is that negotiations began in June 2002, and were not 
completed until November 21, 2002; too late to meet the December 1, 2002 
deadline. 



2. Paragraph 9 of the First Amendment of the lease describes the process for 

establishing an extension option rental rate; this process was used by the Mart 
(Landlord) and the City (Tenant). First it states "At the commencement of each 
Extended Term, the Rent shall be adjusted to equal ninety- five percent (95%) of 

the Prevailing Market Rate : \ The Amendment also includes a process for 

each party to hire an appraiser. If the appraisers' value is more than 10% apart, a 
third appraiser will be hired. The third appraiser will then average his value with 
the closer of the two previous appraisals. "This third appraisal will then be 
averaged with the closer of the two previous appraisals and the result shall be the 
Prevailing Market Rate". 

The 875 Stevenson Street Landlord's appraiser (Rhoades) recommended a S26.50 
per square foot rental rate, while the City's appraiser (Cameghi) set forth a rate of 
S12.38 per square foot. The third appraiser (Bohegian) was hired by the City and 
the Landlord, and established a rate of S22.00 per square foot. 

If the City and the Landlord strictly followed the mechanism outlined in the lease, 
the Prevailing Market Rate would have been midpoint between the Rhodes 
appraisal ($26.50) and the Bohegian appraisal ($22.00) specifically $24.25 per 
square foot. The City and the Landlord, however, agreed to accept the Bohegian 
rental rate of $22.00, which is less than 95% of the $24.25 (S23.03) . It was 
advantageous to the City to accept $22.00 rather than 95% of $24.25. 

LJ/875 Stevenson/harveyrose 875Stevns2 



Attachment 1 1 
Page 2 of 2 



3. According to the terms of the lease, the City is obligated to lease the entire 

158,442 square foot premises. The third floor of the subject building is presently 
occupied by the Public Utilities Commission staff. The staff will be moved to 
1155 Market Street in the spring of 2003. The furniture, telephones and servers 
will remain in the leased space to be used by the next tenant: Department of 
Aging and Adult Services will move in as soon as is practical. Any large office 
move normally takes 60 to 90 days to have one tenant move out and a new tenant 
move in. The Real Estate Division anticipates that the time available will 
facilitate a smooth transition from PUC to DAAS. 



4. The cost of security, j anitorial / maintenance and electricity during the current 
fiscal year is as follows: 

Security $264,000 

DPW/Maint. 701,000 

Electricity 85.000 

$1,050,000 



Larry Jacobson 12/4/02 



LJ/875 Stevenson/harveyrose 875Stevns2 

30 



Memo to the Finance Committee 

January 22, 2002 Finance Committee Meeting 



I tem 4- File 02-1703 
Departments: 

Item: 



Description: 



Comments: 



Department of Public Works (DPW) 
Department of Parking and Traffic (DPT) 
Department of Building Inspection (DBI) 

Hearing to review progress made toward implementation 
of Street Space Permit reform (File 02-1067) previously 
approved by the Board of Supervisors on August 12, 2002. 
This hearing is to focus on an update from the 
Department of Public Works (DPW), Department of 
Building Inspection (DBI), and the Department of 
Parking and Traffic (DPT) regarding the status of actual 
fee collections, enhanced enforcement regarding the rules 
of Street Space occupancy, improved signage to indicate to 
the public reserved on-street spaces and a local hotline for 
residents with concerns about specific street permits. 

On August 12, 2002 the Board of Supervisors approved 
File No. 02-1067 which primarily established a new fee 
structure for Street Space Occupancy Permit fees, 
including assessing right-of-way occupancy costs and 
providing for fee refunds. Prior to the passage of the new 
fees, the Street Space Occupancy Permit fee was one- 
tenth of one percent of the construction project value 
regardless of the duration of the permit and the amount of 
space reserved. The new fees approved by the Board of 
Supervisors include: (1) a Street Space Occupancy Permit 
fee and (2) a Public Right-of-Way Occupancy assessment. 
The permit fee is $10.45 per month per 20 linear feet or 
fraction thereof, and the public right-of-way assessment is 
$29.55 per 20 linear feet, resulting in a total fee of $40 per 
space per month for up to 20 linear feet. 

1. According to Ms. Tina Olson of DPW, in FY 2001-2002, 
total actual revenues received from Street Space 
Occupancy Permit fees were approximately $1,300,000. 
Ms. Olson projected in July of 2002 that (a) continuation 
of the existing fees would generate fee revenue of 
$1,412,716 in FY 2002-2003 and (b) approval of the new 
fee structure would generate revenues of $4,533,621 in FY 
2002-2003 based on the new fee structure becoming 
effective on September 1, 2002, and assuming constant 
demand for Street Space Occupancy Permits. On an 
Board of Supervisors 
Budget Analyst 

31 



Memo to the Finance Committee 

January 22, 2002 Finance Committee Meeting 



annual basis, Ms. Olson projected the new fee structure 
would generate a total of $5,511,495 annually, which is 
$4,211,495 or 324 percent more than annual revenues of 
approximately $1,300,000 realized in FY 2001-2002. 
These fees accrue to the General Fund. 

2. According to Mr. Ben Rosenfield of the Mayor's Office, 
the FY 2002-2003 budget included two technical 
adjustments approved by the Board of Supervisors, which 
appropriated a total of $3,120,905 of the projected new 
street space occupancy fees and assessment revenues. Of 
this $3,120,905 appropriation, $741,370 was appropriated 
for additional DPW expenditures and $2,379,535 was 
appropriated to fund other General Fund expenditures. 
Based on the new fee structure, $4,533,621 was 
appropriated by the Board of Supervisors in the FY 2002- 
2003 budget from the estimated Street Space Occupancy 
Permit fee and Public Right-of-Way Occupancy 
assessment assuming the new fee structure becoming 
effective on September 1, 2002. 

3. The Budget Analyst's report on File No. 02-1067, dated 
August 1, 2002, states "street space occupancy fee and 
occupancy assessment revenues are likely to be less than 
the total estimated revenues of $4,533,621 in FY 2002- 
2003 if increased enforcement and towing of permit 
holders' vehicles result in decreased demand for street 
space occupancy permits." This report also noted "that 
the intent of the Sponsor's Office in developing the 
legislation was to encourage contractors to reserve the 
minimum amount of on-street parking required for 
construction projects in order to provide the maximum on- 
street parking to the public." Ms. Olson also stated that 
"DPW cannot accurately estimate with certainty the 
impact that the increased fees and the additional 
enforcement will have on the demand for street space 
permits." In response to our report and Ms. Olson's 
concerns, Mr. Rosenfield stated that "the Mayor's Budget 
Office would work with DPW and the Controller to 
monitor actual revenue collections during the course of 
the fiscal year and adjust spending levels should such 
adjustments be required." 



Board of Supervisors 
Budget Analyst 
32 



Memo to the Finance Committee 

January 22, 2002 Finance Committee Meeting 



4. According to Ms. Olson, based on activity between 
October 1, 2002 through December 30, 2002, Street Space 
Occupancy Permit fee and Public Right-of-Way Occupancy 
assessments are currently estimated to generate revenues 
of $1,256,400 in FY 2002-2003, which is $3,277,221 or 
approximately 72 percent less than the DPW projections 
in July of 2002 of $4,533,621. Ms. Olson notes that if 
construction activities increase in the Spring, Street 
Space Occupancy Permit fee revenues and Public Right- 
of-Way Occupancy assessment revenues would increase 
above the current estimates. The Attachment to this 
report, provided by Ms. Olson, explains why the new fee 
structure is now projected to generate revenues in FY 
2002-2003 which are approximately 72 percent less than 
the prior DPW projections in July of 2002. 



Board of Supervisors 

Budget Analyst 

33 



City and County of San Francisco 



Attac nment 
Page 1 of 3 




Willie Lewis Brown, Jr., Mayor 
Edwin M. Lee, Director 



Phone: (415)554-692 

Fax: (415) 554-691 

TDD:(415)554-69C 

http://www.sfdpw.co 



Department of Public Wort 

Finance and Budget Divisic 

City Hall, Room 3^ 

1 Dr. Carlton B. Goodlett Plac 

San Francisco, CA 94102-46' 

Tina Olson, Division Manag< 



MEMORANDUM 

Date: January 10, 2003 

To: Elaine Forbes, Budget Analyst's Office 

From: Tina Olson, DPW 

Subject: Street Space Fee Revenue Projections 

As requested, the following is a summary of the assumptions I used to develop Street 
Space fee revenue projections in July 2002, actual revenues realized from October 2002 
through December 2002, the variance between actual and projected revenues and the 
reason for the variance. 

Please note that we have only had three months of experience implementing the new 
Street Space fee and that experience is in the late fall and early winter months when 
construction activity tends to be slower than in the spring and summer months. Thus, a 
straight-line projection on these three months is likely to result in an amount less than it 
would if we had at least six months of data and preferably nine months. At this time, 
DPW is projecting to receive a total of approximately $1.5 million from the Street Space 
fee in FY 2002-03 including revenues collected July 2002 through September 2002 under 
the previous Street Space fee legislation. However, if construction activity picks up in the 
spring and summer FY 2002-03 Street Space revenues should be greater than SI. 5 
million. 

July 2002 Street Space Revenue Projections 

I calculated the revenues generated of $5,030,1 12 annually by the $40 monthly fee based 
on the five-year average number of residential and commercial projects street space 
permits issued (1,616 residential plus 1,007 commercial = 2,623) multiplied by the 
average construction duration for residential and commercial projects (6 months and 12 
months respectively) multiplied by the average number of parking spaces required by 
residential and commercial projects (3 and 8 respectively). 



"IMPROVING THE QUALITY OF LIFE IN SAN FFIANCISCO" We are dedicated individuals committed to teamwork, 
customer service and continuous improvement in partnership with the community. 
Customer Service Teamwork Continuous Improvement 

34 



Attachment 
Budget Analyst Page 2 of 3 

Street Space Fees 
January 7, 2003 
Page 2 



I determined average construction durations and average number of parking spaces 
required based on conversations with several DP W staff experienced in overseeing 
construction projects. DPW didn't have a database that tracked this information. 

Experience from October 2002 through December 2002 

As described in the attached spreadsheet, we are currently projecting to issue a total of 
3,372 Street Space permits in FY 2003-04 which is greater than the July 2002 projection. 
However, the average occupancy time is significantly less than projected. Specifically, 
from October 1, 2002 through December 31, 2003 the average residential permit duration 
is 1.25 months and the average commercial permit is six months. Because a contractor 
can only seek a permit for six-month intervals, the average commercial permit may be 
greater than six months. Sixty percent of the residential permits are related to roofing 
projects that only require one-month permits. As a result, the average residential permit 
duration of 1.25 months reflects the preponderance of roofing projects. 

Since October 1, 2002, the average Street Space permit in residential areas has reserved 2 
parking spaces and the average Street Space permit in commercial areas has reserved 
3.75 parking spaces. 

As previously indicated, contractors typically seek street space permits for larger 
construction projects in the spring and summer months. Thus, the 3-months experience of 
October through December permits may not be representative of the types of Street Space 
permits we will issue for the remaining six months of FY 2002-03. 

Analysis 

The following are some reasons for the differential in the projected permit durations and 
parking spaces. 

> Since the economy has slowed down, the types of construction projects seeking 
permits are smaller renovation projects that require fewer parking spaces for 
fewer months. As previously noted, sixty percent of the residential Street Space 
permits have been for roofing projects. 

> The new Street Space fee methodology is providing a disincentive to contractors 
to take more spaces for longer durations than they really need. Many contractors 
are taking out one to three month Street Space permits for projects with 6-month 
construction permits. We should understand the long-term effect the new fee has 
on contractor behavior better over the next two to three years. 



35 



Attachment 
Page 3 of 3 



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36 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



Item 5 - File 02-1995 
Departments: 



Item: 



Description: 



Department of Telecommunications and Information 

Services (DTIS) 

Emergency Communications Department (ECD) 

San Francisco Police Department (SFPD) 

Treasurer/Tax Collector 

Ordinance amending the San Francisco Police Code by 
amending Sections 3710, and 3711 through 3720, by 
adding Sections 3710.1 through 3710.9 and adding a new 
Section 3721, and by re-numbering current Section 3721 
as Section 3722, to give the Director of Emergency 
Communications responsibility for administering the 
substantive provisions of the Police Emergency Alarm 
Ordinance and to provide for billing and collection of 
license and license renewal fees by alarm companies. 

The proposed ordinance would amend the Police 
Emergency Alarm Ordinance for the annual licensing of 
emergency alarm systems for commercial and residential 
buildings to transfer responsibility for administering the 
Police Emergency Alarm Ordinance from the 
Treasurer/Tax Collector to the Director of the Emergency 
Communications Department (ECD) and to provide for 
billing and collection of the annual license fee and the 
license renewal fee from alarm users by alarm companies. 
This proposed ordinance would also require alarm 
installation companies (a) to collect the alarm license fees 
from new customers prior to the installation of a new 
alarm system and (b) to remit the collected fees to the 
Treasurer/Tax Collector. 

In June of 2002 (File 02-1078), the Board of Supervisors 
approved a new Police Emergency Alarm Ordinance, 
which established the following new permits and fees: (i) 
a $60 permit for commercial building emergency alarm 
systems; (ii) a $40 permit for residential building 
emergency alarm systems and imposed penalties for false 
alarms; and (iii) penalty fees to an individual alarm user 
of $100 for the second false alarm during the calendar 
year, $150 for the third false alarm during the calendar 
year, $200 for the fourth false alarm during the calendar 
year, and $250 per false alarm for any additional false 
alarms during the calendar year. Under the proposed 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

37 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



ordinance, the aforementioned fee levels would remain 
the same. However, the proposed ordinance would amend 
the Police Emergency Alarm Ordinance to require a 
license rather than a permit be obtained by commercial 
and residential alarm users and adds a $100 penalty for 
operating a non-licensed alarm system. Mr. William Lee 
of the ECD advises that the proposed ordinance would 
require a license rather than a permit because the Tax 
Collector's Licensing System recognizes a "permit" as an 
authorization instrument with a fee that is charged and 
paid only one time, whereas, a "license" is recognized as a 
renewable instrument payable on an annual basis. 

Presently, the provisions of the existing Police Emergency 
Alarm Ordinance do not provide for alarm companies to 
collect permit and permit renewal fees and do not require 
alarm companies to collect the permit fee from new 
customers prior to the installation of a new alarm system. 
Mr. Lee advises that under the provisions of the existing 
ordinance the Treasurer/Tax Collector is required to 
attempt to contact each individual alarm user directly to 
collect the fees. Mr. Lee reports that the proposed changes 
would require alarm installation companies to collect the 
alarm license fees from new customers prior to the 
installation of a new alarm system and to remit the 
collected fees to the Treasurer/Tax Collector. The 
proposed amendments would require every alarm 
monitoring company doing business in San Francisco to 
send the Treasurer/Tax Collector a complete list of its 
customers and alarm systems located in San Francisco on 
the effective date of the ordinance. The proposed 
amendments provide that alarm monitoring companies 
make a good faith effort to collect the alarm license and/or 
renewal fee from existing customers and that alarm 
monitoring companies refer an alarm user's account to the 
Treasurer/Tax Collector if the license renewal fee is more 
than 30 days late. However, the proposed amendments 
do not require the alarm monitoring companies to cancel 
service to a customer for failure to pay. The proposed 
ordinance would require alarm users to renew their alarm 
licenses annually prior to the expiration of the license on 
January 1 of each year. Under the existing ordinance, 
alarm users are required to submit the renewal fee to the 
Treasurer/Tax Collector. The proposed changes would 
require the alarm users to submit an updated license 
BOARD OF SUPERVISORS 
BUDGET ANALYST 
38 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 

application and to pay the renewal fee to either the 
Treasurer/Tax Collector or directly to alarm monitoring 
companies, who would then remit such fees to the 
Treasurer/Tax Collector no later than the last day of the 
month following the month of collection. 

The review of City fees conducted by the Mayor's Budget 
Office in the spring of 2002 recommended implementation 
of a new permit and fee for emergency alarm systems and 
a new penalty for repeat false alarms by the same alarm 
system. As previously noted, such fees were approved by 
the Board of Supervisors. Of the estimated 60,000 alarms 
necessitating a Police Department response annually, an 
estimated 96 percent, or 57,600, are false alarms. 
Because the City has a policy of 100 percent response to 
all alarms, the Police Department responds to each of the 
estimated 60,000 alarms at commercial and residential 
buildings each year, which costs the Police Department 
over $3.5 million annually, according to the Controller's 
Office. The alarm license fee and false alarm penalty 
revenues, estimated by the Controller's Office to be 
$1,950,835, were included in ECD's FY 2002-2003 budget 
to cover the cost of a new informational technology (IT) 
system for licensing and for the billing and the collection 
of the license and license renewal fees, new collections 
personnel in the Treasurer/Tax Collector's Office and to 
more fully cover the cost of Police response to false 
alarms. However, as reported to the Board of Supervisors' 
Budget Committee in June of 2002, even if all of the 
projected revenues of $1,950,835 for the Alarm Fee and 
False Alarm Penalty Fee were realized, such revenues 
would still only recover approximately 51.5 percent of the 
total estimated cost to the General Fund of $3,790,592 to 
respond to false alarms and to administer the licenses. 
The balance of an estimated $1,839,757 would remain a 
cost to the General Fund. The Budget Analyst notes that 
all of the costs associated with responding to false alarms 
are currently borne by the General Fund. 

Comments: 1. Mr. Lee states that none of the existing alarm fees and 

penalties previously approved by the Board of Supervisors 
in June 2002 have been either billed or collected from 
alarm users and therefore no revenues have been 
collected m FY 2002-2003 because of the difficulties in 
locating and contacting the estimated 30,000 individual 
BOARD OF SUPERVISORS 
BUDGET ANALYST 
39 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



alarm users. Therefore, Mr. Lee advises, the proposed 
amendments to the Police Emergency Alarm Ordinance 
include a new provision that permits alarm monitoring 
companies (a) to collect the license and license renewal 
fees from alarm users and issue license applications to 
such users in order to facilitate locating and billing the 
individual alarm users and (b) to remit such fees to the 
Treasurer/Tax Collector. As stated above, the proposed 
ordinance also requires alarm companies to collect the 
license fee from new customers prior to the installation of 
a new alarm system and to remit all fees collected to the 
Treasurer/Tax Collector. 

2. According to Ms. Maria Taylor of the Controller's 
Office, emergency alarm fee revenues for FY 2002-2003 
are currently estimated at $1,000,000, including no 
revenues estimated for the False Alarm Penalty Fee. 
This new estimate of $1,000,000 is $950,835 or 48.7 
percent less than the prior estimate of $1,950,835 
included in ECD's FY 2002-2003 budget. 

3. The FY 2002-2003 budget appropriated total 
expenditures of $272,146 for the implementation of the 
Police Emergency Alarm Ordinance. These expenditures 
included (a) $3,160 for supplies for training for Police 
personnel; (b) $95,252 for Treasurer/Tax Collector 
personnel and materials & supplies including 0.25 new 
FTE 4308 Senior Collections Officer and 1.5 (2 positions) 
new FTE 1630 Account Clerks, three new computers, 
three chairs and three desks for the new personnel; (c) 
$75,000 for enhancements to the ECD informational 
technology (IT) system to be implemented by the 
Department of Telecommunications and Information 
Services (DTIS); (d) $75,000 for DTIS to implement the 
billing and collection system for Treasurer/Tax Collector; 
and (e) $23,734 for Police Overtime for training. 

4. Mr. Bink Feldkamp of DTIS reports that DTIS is in 
the process of developing the IT system for licensing and 
for the billing by the Treasurer/Tax Collector and the 
collection of license and license renewal fees by the 
Treasurer/Tax Collector. Mr. Feldkamp further reports 
that as of December 31, 2002, approximately $35,000 had 
been expended on the IT system. DTIS has expended the 
$35,000 on: (a) initial analysis of the system requirements 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

40 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



and the ordinance itself, (b) attending and participating 
in the various meetings, (c) reviewing options for an IT 
solution, (d) developing a requirements scope document, 
and (e) beginning the development of the final system. 
According to Mr. Lee, none of the remaining $237,146 
($272,146 less $35,000) included m the FY 2002-2003 
budget for has been expended. Mr. Lee further reports 
that none of the 1.75 FTEs representing three new 
positions, as listed above, who will be responsible for the 
billing and collection of the license and license renewal 
fees in the Treasurer/Tax Collector's Office, have been 
filled. 

5. Mr. Lee reports that the proposed amendments to the 
Police Emergency Alarm Ordinance provide for the 
transfer of responsibility for administering the regulatory 
functions of the Police Emergency Alarm Ordinance from 
the Treasurer/Tax Collector to the ECD because the 
Treasurer/Tax Collector has responsibility for billing and 
collection functions. Under the proposed amendments, 
Mr. Lee advises that ECD would be the direct contact for 
alarm users and alarm companies for hearings and 
appeals for penalties and/or revocation of an alarm 
license. Presently, the Treasurer/Tax Collector has 
responsibility for those regulatory responsibilities. Ms. 
Shana Margolis of the Treasurer/Tax Collector's Office 
advises that the new 4308 Senior Collections Officer (0.25 
FTE in FY 2002-2003) and two new 1630 Account Clerks 
(1.5 FTE in FY 2002-2003) were authorized specifically to 
be responsible for the billing and collection of the fees, fee 
renewals and penalties in accordance with the Police 
Emergency Alarm Ordinance. Ms. Margolis reports that 
the bulk of the billings and collections work will pertain 
to penalties charged for false alarms and not to the 
annual licensing for the alarm systems. 

6. Ms. Margolis now states the three authorized positions 
included in the Treasurer/Tax Collector's FY 2002-2003 
will not be sufficient to handle the work related to the 
projected 57,600 false alarms since, according to Ms. 
Margolis, the estimated number of false alarms 
previously provided to the Treasurer/Tax Collector was 
26,000 when personnel were requested during the FY 
2002-2003 budget. The Budget Analyst notes that the 
three positions were designated as L, or limited tenure, 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

41 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 

positions in the FY 2002-2003 budget. The Budget 
Analyst recommended the three positions be limited 
tenure positions because workload data was not available 
for the new positions. Therefore, the Budget Analyst 
recommended that the positions be evaluated after the 
Police Emergency Alarm Ordinance is implemented to 
determine the staffing requirements based on actual 
workload data. The Budget Analyst will review the three 
positions as well as any additional budget requests 
related to this ordinance as part of the annual budget 
review for FY 2003-2004. 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGETANALYST 

42 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



Item 6 -File 02-1976 

Department: 

Item: 



Amount: 
Grant Period: 

Source of Funds: 
Required Match: 
Indirect Costs: 
Description: 



Public Library- 
Resolution authorizing the Public Library to accept and 
expend a grant in the amount of $13,815 from the 
California State Library as part of the Federal Library 
Services and Technology Act (LSTA) to reimburse tuition 
expenses of six Library Employees pursuing a degree or 
certification in Library Science at an institution of higher 
education. Employees participating in the program 
applied to, and were selected by, the California State 
Library. 

$13,815 

October 7, 2002 through September 30, 2003 
(approximately one-year. See Comment No. 1) 

California State Library Act-LSTA (See Comment No. 2) 

None required 

$1,256 (ten percent of $12,559 in direct costs) 

The proposed resolution would authorize the San 
Francisco Public Library (Public Library) to accept and 
expend a grant from the California State Library to 
reimburse tuition for six Public Library non-librarian 
staff pursuing a degree or certificate in Library Science at 
an institution of higher education. 

Six Public Library employees applied for and were 
accepted into the proposed tuition reimbursement 
program for non-librarians, offered by the California State 
Library. The California State Library has awarded 
$12,559 to the Public Library for tuition reimbursement 
for three semesters, Fall 2002, Spring 2003 and Summer 
2003, in the accredited Library Science program at San 
Jose State University. The California State Library also 
provided an additional $1,256, or 10 percent of direct 
costs, to cover indirect costs for the Public Library, for a 
total grant amount of $13,815. According to Ms. Mary 
Hudson from the Public Library, the six selected Public 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

43 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 

Library employees must provide official transcripts and 
registration fee receipts to the Library's Director of 
Human Resources, before tbey can be reimbursed. 
According to Ms. Hudson, Public Library employees are 
not paid for time spent taking courses. 

Budget: Tuition Reimbursements for 6 Public Library Employees 

Lynne Barnes $2,865 

Donya Drummond 1,945 

Maricela Leon 1,847 

Elaine Tanzman 1,895 

Nicole Termini 1,482 

Sally Wong 2,525 

Subtotal $12,559 

Indirect Costs 1.256 

Total $13,815 

The subject grant would reimburse the six Public Library 
employees' tuition costs. The amounts of the tuition 
awards were determined on an individual basis by a State 
Library review panel to whom the students submitted an 
application and essay, and vary based on the number of 
courses to be taken. Ms. Hudson advises that the tuition 
costs were based on the actual costs provided by the San 
Jose State University Library Science School. 

Comments: 1. Although the subject grant period began on October 7, 

2002, Ms. Hudson reports that the Public Library has not 
yet accepted or expended the subject grant. According to 
Ms. Hudson, the tuition for the six Public Library 
employees will be paid on a reimbursement basis only at 
the end of the semester after the employees have provided 
official transcripts and registration fee receipts to the 
Library's Director of Human Resources. Ms. Hudson 
advises that such payments would not be made until the 
end of January 2003. Therefore, the proposed resolution 
is not retroactive. Ms. Hudson advises that the subject 
grant is only now coming to the Board, over three months 
after the grant period began, due to administrative delays 
in the Public Library. 

2. The California State Library's major function is to 
support California's libraries, Statewide. These services 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

44 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



are combined into financial assistance and technical 
consulting programs to address current California library 
needs. LSTA grants require quarterly and final reports 
on financial and program activities to be submitted to the 
California State Library. Ms. Hudson advises that the 
Public Library would comply with all of the reporting 
requirements. Ms. Hudson advises that the California 
State Library tuition reimbursement program is an 
ongoing State program. In October of 2001, the California 
State Library awarded the Public Library $16,267, 
including $1,627 for indirect costs, for tuition 
reimbursement for seven Public Library employees for the 
period of October 1, 2001 through September 30, 2002 
(File 01-2217). Ms. Hudson further advises that the 
Public Library anticipates applying for such funding 
again next year. 

3. The Attachment is the Public Library's Grant 
Application Information Form, which includes the 
Disability Access Checklist. The Grant Application 
Information Form incorrectly states that the grant period 
is "upon approval" through September 30, 2002, when it 
should state from October 7, 2002 through September 30, 
2003. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



File Number: 

(Provided by Clerk of Board of Supervisors) Attachment 

Page 1 of 2 
Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: Public Library Staff Education Program 

2. Department: Public Library 

3. Contact Person: Mary Hudson Telephone: 557-4235 

4. Grant Approval Status (check one): 

[X] Approved by funding agency [ ] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $13,815 

6a. Matching Funds Required: None 
b. Source(s) of matching funds (if applicable): 

7a. Grant Source Agency: California State Library & California Library Act 
b. Grant Pass-Through Agency (if applicable): 

8. Proposed Grant Project Summary: 

These funds are to reimburse six non-professional library staff members for tuition costs of Library coursework 
at an accredited college. The employees applied to the State Library, were reviewed and accepted by the 
program panel at the State level. The Human Resources Department of the Library will monitor the program 
and review student transcripts and fee receipts prior to issuing reimbursement funds. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: Upon Approval End-Date: September 30, 2003 

1 0. Number of new positions created and funded: 

1 1 . If new positions are created, explain the disposition of employees once the grant ends? N/A 

12a. Amount budgeted for contractual services: $0 

b. Will contractual services be put out to bid? 

c. If so, will contract services help to further the goals of the department's MBEA/VBE 

requirements? 

d. Is this likely to be a one-time or ongoing request for contracting out? 



46 



3a. Does the budget include indirect costs? [X] Yes [ 1 No . . . . * 

a l j l j Attachment 

b1. If yes, how much? $1,256 a9 

b2. How was the amount calculated? 10% State Allowance 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [ ] To maximize use of grant funds on direct services 

[ ] Other (please explain): 

4. Any other significant grant requirements or comments: No 



Disability Access Checklist*** 

5. This Grant is intended for activities at (check all that apply): 

| Existing Site(s) [ ] Existing Structure(s) [X] Existing Program(s) or Service(s) 

| Rehabilitated Site(s) [ j Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

| New Site(s) [ ] New Structure(s) 

6. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
nd concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
II other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
isabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

:ornments: 



epartmental or Mayor's Office of Disability Reviewer: Marti Goddard, Access Services Manager 

(Name) 

ate Reviewed: 



epartment Approval: Susan Hildreth City Librarian 

(Name) * (Title) 

•iL- Ujuu**. 

(Signature) 



47 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



Item 7 -File 02-1973 
Departments: 

Item: 



Description: 



Municipal Transportation Authority (MTA) 
Municipal Railway (Muni) 

Resolution approving the award of Municipal Railway 
Contract No. CS-138 for Professional Engineering and 
Other Support Services for the Muni Metro Third Street 
Light Rail Project: New Central Subway, with the Joint 
Venture of Parsons Brinckerhoff Quade & Douglas, Inc. 
and PGH Wong Engineering, Inc., to provide necessary 
professional engineering and other support services in an 
amount not to exceed $29,800,000, and for a term not to 
exceed five years. 

The proposed resolution would approve a contract not-to- 
exceed $29,800,000 between Muni and a Joint Venture 
comprised of Parsons Brinckerhoff Quade & Douglas, Inc. 
and PGH Wong Engineering, Inc. (PB/Wong) for 
professional engineering and other support services, 
including conceptual engineering services 1 and 
preliminary engineering services 2 for the New Central 
Subway of the Third Street Light Rail Project. The 
proposed contract includes a detailed list and schedule of 
88 tasks to be completed and deliverable to Muni by 
PB/Wong. 

On November 19, 2002, the Municipal Transportation 
Agency (MTA) Board of Directors approved the subject 
contract with PB/Wong for an amount not to exceed 
$29,800,000 and approved an initial expenditure of not to 
exceed $4,300,000 (see Comment No. 2). The MTA 
approved $4,300,000 of the $29,800,000 contract to begin 
conceptual engineering on the New Central Subway. The 
subject resolution provides that the MTA will not 
authorize the preliminary engineering design work to 
begin unless (1) PB/Wong has satisfactorily completed 



1 The Scope of Work included in the Request for Proposals for the subject contract states that the Conceptual 
Engineering phase of the contract will include "completion of all necessary and relevant studies/investigation, 
design criteria, functional requirements, leading to well defined, adequate, feasible, cost-effective design 
concepts to launch directly into Preliminary Engineering (the first part of Final Design)." 

2 The Scope of Work included in the Request for Proposals for the subject contract states that "completion of 
Preliminary Engineering Design for this Contract shall be defined as the final development and completion of 
all necessary and relevant studies, criteria and concepts for the Project AND the 35% completion of detailed 
design (final design), i.e., 35% completion of what could eventually be the construction contract bid documents 
for a traditional design/bid/construction project." 

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BUDGET ANALYST 

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Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



conceptual engineering; (2) additional funds are made 
available by the Federal Transit Administration (FTA) 
and the State; and (3) the FTA grants approval to begin 
preliminary engineering. 

The Third Street Light Rail Project is comprised of two 
phases. Phase 1 will extend Muni Metro light rail service 
south from its current terminal at Fourth and King 
Streets. The line will cross the Fourth Street Bridge and 
run along Third Street and Bayshore Boulevard, ending 
at the Bayshore CalTrain Station in Visitacion Valley. 
Tracks will be constructed primarily in the center of Third 
Street to improve safety and reliability and 19 stops will 
be provided. Phase 1 is scheduled to be completed and 
open for service in 2005. The estimated cost for Phase 1 
is $583,900,000, which includes the purchase of 25 new 
light rail vehicles. Phase 2 will extend light rail service 
north from King Street along Third Street, entering a new 
Central Subway near Bryant Street, crossing beneath 
Market Street and running under Geary and Stockton 
Streets to Stockton and Clay Streets. Underground 
subway stations will be located at Moscone Center, 
Market Street, Union Square and Clay Street in 
Chinatown. Phase 2 is scheduled to be completed and 
open for service in 2011. The estimated cost for Phase 2 
is $763,900,000. Therefore the total estimated cost for 
Phases 1 and 2 of the Third Street Light Rail Project is 
$1,347,800,000. Attachment I, provided by Muni, contains 
a budget totaling $1,347,800,000 for the Third Street 
Light Rail Project including this subject contract of 
$29,800,000 and contains anticipated funding sources to 
pay for the $1,347,800,000 project, including the funding 
source for the subject contract of $29,800,000. The $4.3 
million approved for expenditure by the MTA will be 
funded by State of California Traffic Congestion Relief 
Program funds allocated for the Third Street Light Rail 
Project. Mr. Thomas states that the funding for the new 
Central Subway will be from the FTA's New Starts 
Program funds, State of California Traffic Congestion 
Relief Program funds and Proposition B Sales Tax funds. 
However, as of the writing of this report, with the 
exception of the $4.3 million from State Traffic 
Congestion Relief Program funds, Muni has not finally 
determined the specific amounts of the funding sources 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

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Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



Budget: 



Comments: 



for the remaining $25,500,000 of the subject $29,800,000 
contract. 

Muni has provided a detailed expenditure budget for the 
proposed not-to-exceed contract with PB/Wong of 
$29,800,000, for Professional Engineering and Other 
Support Services for the Muni Metro Third Street Light 
Rail Project: New Central Subway. The Budget Analyst 
has reviewed the detailed budget. A summary of that 
budget is as follows: 

Conceptual Engineering Amount 

Labor $4,813,379 

Overhead 6.253.396 

Subtotal $11,066,775 

Profit on the subtotal of $11,066,775 
for Labor and Overhead 
(9.31 % of Labor and Overhead Costs, 
see Comment No. 3) 1,030,270 

Other Expenses including Geotechnical 

Equipment, Printing and Travel 1,388,263 

Allowance for Additional Studies 
(see Comment No. 4) 750,000 

Subtotal Conceptual Engineering $14,235,308 

Preliminary Engineering 
Labor 5,646,336 

Overhead 7.282.266 

Subtotal $12,928,602 

Profit on the subtotal of $12,928,602 
for Labor and Overhead 
(11.08 % of Labor and Overhead Costs, 
see Comment No. 3) 1,432,450 

Other Expenses including Geotechnical 

Equipment, Printing and Travel 453,640 

Allowance for Additional Studies 
(see Comment No. 4) 750,000 

Subtotal Preliminary Engineering $15,564,692 

Total Estimated Contract Costs $29,800,000 

1. According to Mr. John Thomas of Muni, a Request for 
Proposals (RFP) for the subject contract was advertised in 
the newspapers listed in Attachment II on November 6, 
2001. Muni has provided the Budget Analyst's Office 
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BUDGET ANALYST 
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Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



with the "Selection Committee Report" on the selection 
process on the award of this contract. The Selection 
Committee Report states that Muni received written 
proposals from the following three firms: (a) Bechtel 
Infrastructure Corporation; (b) Central Transit 
Consultants, a Joint Venture of URS, Parsons 3 and AGS, 
Inc.; and (c) PB/Wong, the selected contractor. The three 
written proposals were evaluated and scored by a five- 
member Selection Committee consisting of: (a) Dennis 
Tsai, Muni Construction Division (non-voting); (b) Paul 
Ward, San Francisco County Transportation Authority; 
(c) Patty DeVlieg, Muni Construction Division; (d) John 
Thomas, Muni Construction Division; and (e) Phil Chin, 
Department of Public Works. As shown in Attachment 
III, provided by Mr. Thomas, the following scores were 
received as a result of the written proposals: 



Firm 


Score 


Central Transit Consultants 


85.67 


Bechtel Infrastructure Corporation 


76.17 


PB/Wong 


76.00 



All three firms were found to be qualified based on the 
written proposals and were invited to participate in an 
oral presentation and interview. Based on the oral 
presentation and interview process, the Selection 
Committee selected PB/Wong. The following scores were 
received as a result of the oral presentation and interview 
process: 



Firm 


Score 


PB/Wong 


87.50 


Bechtel Infrastructure Corporation 


81. S3 


Central Transit Consultants 


81.17 



As noted above and as shown in Attachment III, PBAVong 
was ranked the lowest for the written proposal and was 
ranked highest for the oral presentation and interview 
process. As noted above and as shown in the first two 
pages of Attachment III, Central Transit Consultants was 
ranked the highest for the written proposal and was 
ranked the lowest for the oral presentation and interview 



3 Parsons Brinckerhoff Quade & Douglas, Inc., of the PB/Wong joint venture and Parsons, of the 
Central Transit Consultants joint venture, are two separate and unrelated companies. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

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Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



process. The final selection of PB/Wong from the three 
qualified firms was based entirely on the firm's highest 
score in the oral presentation and interview process and 
was not based on the scores from the written proposals. 
Attachment IV is a memorandum provided by Mr. 
Thomas which contains the evaluation criteria for the 
selection of this contract award and explains why the 
scores of each firm on the written proposals was not a 
criteria in the final selection for the contractor. According 
to Mr. Thomas "The written proposals enable the 
Selection Committee to identify those firms which are 
within a competitive range of one another, and to 
eliminate those firms which do not meet the minimum 
criteria established in the RFP. The Oral Presentation 
enables the Selection Committee an opportunity to 
observe those professionals who will work on the project 
and to ask questions of them in order to evaluate them 
against the selection criteria." As noted in Attachment IV 
price was not considered either in the evaluation of the 
written proposals or in the oral presentation and 
interview process. 

Following the selection process described above, Muni 
received complaints that the selection process had been 
unduly influenced. In response to inquiries of the Budget 
Analyst, Mr. Robert Bryan of the City Attorney's Office 
states that, at the request of the MTA, the City Attorney's 
Office conducted a confidential investigation of that 
selection process and reported to the MTA on the matter. 
Mr. Bryan states that disclosure of any information 
pertaining to the City Attorney's investigation of the 
selection process, including the events that prompted the 
investigation, requires the approval of the MTA. In 
response to inquiries from the Budget Analyst about the 
City Attorney's report concerning the nature of the 
complaints with respect to the selection process, Mr. 
Michael Burns, Executive Director of the MTA stated 
"Our desire is to maintain the confidentiality of the 
investigation" and further states that "For the Board to 
consider a request to release the Report, I would need to 
discuss this with them at a scheduled meeting." 

Subsequently, Muni assembled a second Selection 
Committee, which reevaluated the same three written 
proposals previously submitted and conducted a second 
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BUDGET ANALYST 
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Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



round of oral presentations and interviews for the same 
three firms. According to Mr. Thomas, the second 
Selection Committee was composed of five new 
Committee members including: (a) John Funghi, Muni 
Construction Division (non-voting); (b) Ewa Bauer, 
Golden Gate Bridge, Highway and Transportation 
District; (c) Manuel Abad, Bay Area Rapid Transit 
District (BART); (d) Burl Toler, San Francisco 
International Airport, Bureau of Design & Construction; 
and (e) Andre Boursse, Muni Contract Compliance Office 
(Non- Voting). The following scores were received from 
the second Selection Committee as a result of the written 
proposals: 



Firm 


Score 


Central Transit Consultants 


91.33 


Bechtel Infrastructure Corporation 


85 


PB/Wong 


84.33 



The following scores were received from the second 
Selection Committee as a result of the oral presentation 
and interview process: 



Firm 


Score 


PB/Wong 


96.33 


Central Transit Consultants 


94.67 


Bechtel Infrastructure Corporation 87.00 



As noted above and as shown in the third and fourth 
pages of Attachment III, Central Transit Consultants was 
again ranked highest for the written proposal and was 
ranked second for the oral presentation and interview 
process. As noted above and as shown in Attachment III, 
PB/Wong was again ranked the lowest for the written 
proposal and was again ranked highest for the oral 
presentation and interview process. PBAVong was again 
selected for the subject contract award by the second 
Selection Committee. As stated above, the final selection 
of PBAVong was based on the firm's score in the oral 
presentation and interview process and the scores of each 
firm on the written proposals was not a criteria in the 
final selection for the contract. 



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BUDGET ANALYST 

53 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 



2. The Budget Analyst notes that PBAVong's profit for 
conceptual engineering is budgeted at $1,030,270, or 9.31 
percent of the Labor and Overhead Costs for conceptual 
engineering and PB/Wong's profit for preliminary 
engineering is budgeted at $1,432,450, or 11.08 percent of 
the Labor and Overhead Costs for preliminary 
engineering. Mr. Thomas reports that profit on Federally 
funded contracts is based on a negotiated fixed fee. Mr. 
Thomas advises that Muni negotiated a lower fixed 
amount for profit for the conceptual engineering phase 
because, according to Mr. Thomas, PBAVong is exposed to 
less risk in the conceptual engineering phase than in the 
preliminary engineering phase. 

3. As previously noted, no consideration was given to 
price of this $29,800,000 contract in the selection process. 
Ms. Robin Reitzes of the City Attorney's Office states that 
because the contract will be at least partially funded by 
the FTA, the Federal Brooks Act prohibited Muni from 
considering price in the selection of the contractor. The 
Brooks Act states that for the procurement of Architecture 
and Engineering Services: 

(1) An offeror's qualifications be evaluated; 

(2) Price be excluded as an evaluation factor; 

(3) Negotiations be conducted with only the most 
qualified offeror; and 

(4) Failing agreement on price, negotiations with 
the next most qualified offeror be conducted 
until a contract award can be made to the most 
qualified offeror whose price is fair and 
reasonable to the grantee. 

4. Mr. Thomas reports that in order to comply with the 
Brooks Act, Muni requested the three responding firms to 
submit their price in a sealed bid to be included with the 
firms proposals. Mr. Thomas states that the bid prices 
remained sealed throughout the selection process and 
were not considered in the selection process. Mr. Thomas 
reports that Muni unsealed only PBAVong's bid price after 
the Selection Committee selected PBAVong for the subject 
contract. Mr. Thomas states that the bid prices of the 
other two firms: Bechtel Infrastructure Corporation and 
Central Transit Consultants, were never unsealed and 
Muni therefore does not know what their bid prices were. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

54 



Memo to Finance Committee 

January 22, 2003 Finance Committee Meeting 

5. PBAVong bid $28,868,985. The Budget Analyst notes 
that the final negotiated contract price of $29,800,000 is 
$931,015 more that PBAVong s bid of $28,868,985. 

6. As shown in the summary budget above, Muni has 
budgeted a total of $1.5 million for allowances for 
additional studies if needed under the subject professional 
engineering contract with PBAVong including $750,000 
for conceptual engineering and $750,000 for preliminary 
engineering. Attachment V is a memorandum explaining 
why the subject contract includes allowances for 
additional studies. As stated in Attachment V by Mr. 
Thomas 'The allowance for additional studies was 
developed to cover those items which may require 
additional work depending on project progress. During 
contract negotiations staff identified studies which may 
be necessary depending on the results of public meetings, 
input from Citizens Advisory Committees as well 
potential operational requirements which may become 
apparent as additional engineering work is complete. 
These tasks could be moved into the appropriate 
predecessor tasks and included in the baseline budget." 

Recommendation: The Budget Analyst considers the subject resolution to be 

a policy matter for the Board of Supervisors because: 

(a) two Selection Committees ranked Central Transit 
Consultants first and PBAVong last in the written 
proposals, but the final selection of PBAVong was based 
entirely on the oral presentation and interview process, 

(b) Muni was prohibited by Federal law to consider price 
in the award of this contract, 

(c) Muni does not know the price of the two competing 
bidders since their bids were never opened from the 
sealed envelopes. The procedure was only to examine the 
bid price of the consultant that was ranked highest in the 
oral presentation and interview process, 

(d) Although the Muni anticipates funding for the 
remaining $25,500,000 or 85.6 percent of the proposed 
$29,800,000 contract, the specific amounts of the funding 
sources have not yet been finally determined, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

55 



Memo to Finance Committee 

Januaiy 22, 2003 Finance Committee Meeting 



(e) The final negotiated price of $29,800,000 was $931,015 
more than the bid price of PB/Wong, and 

(f)The proposed contract price of $29,800,000 includes 
$1,500,000 for unidentified studies which, according to 
Muni, "may" be undertaken. 

(g) In response to inquiries from the Budget Analyst 
concerning the nature of complaints with respect to the 
selection process and City Attorney's investigation report, 
regarding the amount of this proposed $29,800,000 
contract, Mr. Burns reported "Our desire is to maintain 
the confidentiality of the investigation." and he further 
stated that "For the Board to consider a request to release 
the Report, I would need to discuss this with them at a 
scheduled meeting." 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

56 



Attachment I 



San Francisco Municipal Railway 

Third Street Light Rail Project 

Financial Plan 



Cost 



Initial Operating 


N 


ew 


Central 






Segment 




Si 


bway 




Total 


$ 13.8 


$ 




40.0 


$ 


53.8 


116.9 






64.3 




181.2 


337.4 






455.2 




792.6 


35.6 






147.3 




182.9 


- 






57.1 




57.1 


80.2 






- 




80.2 



Preliminary Enqineering 
Final Desian & Manaaement 
Construction Contracts 
Continqencv 
Project Reserve 
25 Light Rail Vehicles 
Total 



583.9 $ 



763.9 $ 1,347.8 



Funding 



Federal 
State 
Local 
Total 



117.5 
126.0 
340.4 



531.7 
106.2 
126.0 



583.9 $ 



649.2 
232.2 
466.4 



763.9 $ 1,347.8 



Source 



Muni 



57 



Printed 1/15/2003 



JAN-14-2C03 16=05 MUNI. CONSTRUCTION 41b to* j-Wl K.feki/TdU 

Attachment 1 1 
NEW CENTRAL SUBWAY SEGMENT 



1. Los Angeles Times 

2. San Francisco Chronicle 

3. San Francisco Independent 

4. San Jose Mercury 

5. Oakland Tribune 



Source : Muni 



58 



JhN-14-2003 16=05 MUNI, CONSTRUCTION « W ^ ^^ 

Attachment 1 1 
Page 2 of 3 

LIST OF PUBLICATIONS TO BE USED FOR PRINTING PUBLIC NOTICE 



I. The Post Group - 20 th Street, Oakland, CA. 94612 

Attn: Ona Solon, Phone No. (510) 287-8200, Fax No. (510) 763-9670 



2. Chinese Times - 686 Sacramento Street, San Francisco, California 94 1 1 1 
Attn; Advertising Department , Phone No. (415) 982-0135; 
Fax No. (415) 982-3387 ; Info: Publish Monday - Saturday 

3 Philippine News - 235 Grand Avenue, 2 nd Floor, South San Francisco, 

California 94080, Attn: Advertising Department, Phone No. (650) 872-3000, 
Fax No . (650) 872-0217 ; Info: Publish weekly . 

4. Korea Central Daily News - 281 1 Adeline St. Oakland, California 

94608, Attn: RojarYoon, Phone No. (510) 272-4600; Fax No. (510) 272-4616; 
Into: Publish Daily. 

5. Hokubui Mainichi - 1 746 Post Street , San Francisco, California 941 15 
Attn: Chikako Moriya, Phone No. (415) 567-7323; Fax No. (415)567-1110 
Info: Publish Tuesday - Saturday. 

6. La Oferta Review- 1376 North 4 ,h Street, San Jose, California 95112,Attn; 
Franklin G. Andrade, Phone No. (408)436-7850; Fax No. (408)436-7861; 

Info: Publish semi-weekly 

7. Small Business Exchange, Inc.- 703 Market Street, Suite 1000 San Francisco, 
California 94103, Attn; Sharon Bickham, Phone No. (415) 778-6250; 

Fax No. (415) 778-6255; Info: Publish weekly 

8. The China Press - 839 Cowan Road, Burlingame, CA. 94010, 

Phone (650) 652-0588; Fax No. (650) 652-0586. Contact Person: Yi Ning Xie 



Source: Muni 

Pagel of 2 

Rev. 07/19/01 



59 



JAN-14-2003 16=05 MUNI. CONSTRUCTION 415 554 _J4yi H.fcM/Wb 

Attachment II 

.-. Reporter -2»88 Mission Street Suitofl, San Francisco CA94II0 Page 3 of 3 

Phone (4,5) « M7Ui Pta (415) 648-372,; Contact Person! Mar^n Ramire; 

I0 ' 12" B ^,\'w V ' Inc ' " 490S 3 " Street San Fra-cisco, CA 94124- 

Phono (415) 07,-0449; Pax (4,5, 822-8971. Contact Person Mary Ratcliffi 

11. San Francisco Bay Times - 34,0 ,9 lh Street San Francisco CA94IIO 
Phone (4,5) 626-0260; Pax (415) 626-0987. Contact Perse '^anKoWe. 

12. El Latino Newspaper -66 Delano Street, San Francisco CA 94112 
Phone (4 , 5) 552-303 ,; Pax (4,5, 552-2502. Contact r2££J£ R uiz 

ft <£~- £«^We^ _ „„ /ft^.^/; fr . 

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Sou rce : Muni 



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62 



JAM- 14-2003 16=06 



MUNI. CONSTRUCT 1 UN 



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64 



ni\u o 1 . uun 1 Krt.iL, UVrtilSU t-KUJCLl 



1145 Market St.. 5th Fl. . San Francisco, CA 94103-1545 . Fax:(415)554-3176 

Atta c hment 1 
Page 1 of 3 

MEMORANDUM 

January 14, 2003 

To: Sarah Graham, 

Board of Supervisor - Budget Analyst Office 

From: JohnF. Thqd5ks/Jmr^\w\{ n , . 

Proj ect Maaag^l^r_j ^J* ^ ^-^ 

Subject: Professional Engineering for Third Street Light Rail, Central Subway CS-13S 
Consultant Procurement Information 



The Request for Proposals for Professional Engineering for Third Street Light Rail, 
Central Subway, Contract CS-138 utilized the following criteria for selection: 

XI. EVALUATION CRITERIA 

Short-Listing Evaluation Criteria 

Each proposal will be evaluated and short-listed on the basis of the following 
criteria, on a 100-point rating system: 

A. Relevant Experience (30 points maximum): Capability, specific relevant 
experience and qualifications of each consultant firm, subconsultant firm, and 
the proposed personnel. 

B. Proposed Scope and Technical Approach (30 points maximum): 

Proposer's understanding of the Scope of Work and the services required for 
each proposed task; effectiveness of the proposer's work plan, program and 
method or approach of execution; proposer's understanding of special 
issues, problems and constraints, and approach towards mitigating and 
resolving them. 

C. Organization and Management (20 points maximum): Effectiveness of 
the consulting team's organizational structure in executing and managing this 
Project; management approach in providing quality, timely and cost effective 
services for this Project; demonstrated competence and quality performance 
in managing large, complex, multi-discipline project without encumbering the 
client with excessive cost overruns and/or successive time extensions, apart 
from client scope changes or causes totally beyond the Consultant's control. 

D. Service and Staffing Ability (15 points maximum): Ability of the proposer 
to provide timely, qualified and adequate staffing and services to support the 
Project throughout the term of the Contract. 



Pa«c 1 of 3 




Attachment IV 
Page Z of 3 

E. Responsiveness to RFP (5 points maximum): Organization of proposal; 
effectiveness of communication; overall attentiveness to all of the RFP 
requirements 

In addition to the resulting point total, proposals will be subject to compliance with 
DBE/Non-discrimination Requirements, and all other applicable City contracting 
requirements. 

Oral Presentation Scoring Criteria: 

For final selection, the following Oral Presentation Scoring Criteria, also on a 100- 
point rating system, will be used to rank the highest consultant at the oral 
interviews: 

A. Relevant Experience (30 points maximum): Demonstrated capability, 
relevant experience and qualifications of each consultant firm, subconsultant 
firm, and the proposed personnel. 

B. Proposed Scope and Technical Approach (30 points maximum): 

Proposer's understanding of the Scope of Work and the services required for 
each proposed task; effectiveness of proposer's technical work plan, program 
and method of execution; proposer's understanding of special issues, 
problems and constraints, and approach towards mitigating and resolving 
them. 

C. Organization and Management (20 points maximum): Demonstrated 
effectiveness of the consulting team's organizational structure in executing and 
managing this Project, providing quality and cost effective services for this 
Project; clear definition of roles and responsibilities of each firm, discipline and 
key personnel; demonstrated competence and quality performance in 
managing large, complex, multi-discipline projects without encumbering the 
client with excessive cost overruns and/or successive time extensions, apart 
from client scope changes or causes totally beyond the Consultant's control. 

D. Service and Staffing Ability (10 points maximum): Ability of the proposer to 
provide timely, qualified and adequate staffing and services to support the 
Project throughout the term of the Contract. 

E. Presentation Approach and Responsiveness to Questions (10 points 
maximum): Organization of the presentation; effectiveness of 
communications; answers to questions. 

In addition to the resulting point total, proposals will be subject to compliance with 
DBE/Non-discrimination Requirements, and all other applicable City contracting 
requirements. 

The MUNI Construction Division follows a procedure (9.1, Consultant Selection) 
established in 1988 when issuing a Request for Proposals. The policy has been to utilize 



Page 2 of 3 rr 
66 



Attachment IV 
Page 3 of 3 
the written proposals to provide the necessary information to shortlist the firms for oral 
presentations and interviews. Only the most qualified firms shall be eligible for further 
consideration. 

The written proposals enable the Selection Committee to identify those firms which are 
within a competitive range of one another, and to eliminate those firms which do not meet 
the minimum criteria established in the RFP. 

The Oral Presentation enables the Selection Committee an opportunity to observe those 
professionals who will work on the project and to ask questions of them in order to 
evaluate them against the selection criteria. 



6 7 TOTAL P. 06 



MUNI CONSTRUCTION DIVISION . THIRD ST. LIGHT RAIL TRANSIT PROJECT 
1145 Market St.. 5th Fl. . San Francisco, CA 94103-1545 . Fax:(415)554-3176 

Attachment V 
MEMORANDUM P a 9 e l of 2 

January 14, 2003 

To: Sarah Graham, 

Board of Supervisor - Budget Analyst Office 




&CTV/JL o 



Project Maxtag 



Subject: Professional Engineering for Third Street Light Rail, Central Subway CS-138 
Consultant Procurement Information 



The Municipal Transportation Agency has adopted an aggressive schedule to design and 
build the New Central Subway by the year 201 1. In order to achieve such a milestone, a 
concise, focused effort must be made to identify the risks, cost and schedule associated 
with such a project. The conceptual and preliminary engineering phases of such a project 
are key to achieving this objective. 

The allowance for additional studies was developed to cover those items which m ay ■-, 
require additional work depending on project progress. During contract negotiations staff \ 
identified studies which may be necessary depending on the results of public meetings, j 
input from Citizens Advisory Committees as well potential operational requirements which,' 
may become apparent as additional engineering work is completed. These tasks could be/ 
moved into the appropriate predecessor tasks and included in the baseline budget. S 

If these tasks are deleted, the most likely outcome will be to extend the schedule as each 
additional task would be brought forward to the Board of Supervisors. 

The following text has been excerpted from Exhibit A, Scope of Services from the subject 
contract: 

1 .60 Allowance for Special Services and Additional Studies 

Special Services and Additional Studies have been identified as potential work to be performed 
under this allowance pending Muni authorization. Muni will determine the exact scope of work 
depending on project requirements. The potential additional special services and studies include but y 
are not limited to the following: 

4 Full structural analysis of certain critical buildings based on results of Task 1.02-05 

'Additional substation location study (e.g. surface location ) beyond those described under Task 

1.02-10 

"Alternate Central Control Facility Study 

" Alternative Communication System study 

Additional alternative studies for station and portal locations beyond those described under Task 

1.04-01 

68 
Page I of 2 



Attachment V 
Page Z ot z 

Additional alternative studies for Geary Subway Connection beyond those described under Task 

1.04-05 

° Conceptual level Safety Hazard Analyses 

e Additional Board of Consultant Reviews 

* Company 39 3-D simulation models of stations 

° Baseline Air Quality Samplings and Report 

2.60 Allowance for Special Services 

Special services during Phase 2 will be identified as potential work to be performed under this 
allowance pending Muni authorization. Muni will determine the exact scope of work depending on 
project requirements. The potential additional special services and studies include: 

8 Additional Value Engineering at 75% completion of Preliminary Engineering 

Additional Safety Hazard Analysis beyond those described in Task 2.05 

Additional Board of Consultant Reviews 

° Revised Renderings, Simulations, and Presentation Models 

° Additional ADA analyses 

Additional Operating Scenarios Analyses 

"Additional Environmental Hazardous Investigation Studies 



cc: M544 



Page